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LONDON: Investors seeking alternative assets are moving on from gold, whose failure to perform when its price was expected to rise and recent volatility as demonstrated by Monday’s price plunge are prompting them to seek returns and protection elsewhere. While the market’s bedrock of jewelry buyers and central banks has largely stayed intact, the wider investment universe long courted by banks and gold bugs is now once-bitten, twice shy.

Gold prices, becalmed since February after two years of losses, fell to their lowest in five years on Monday as heavy fund liquidation in Asian hours pushed prices down through key chart levels, triggering a wave of stop-loss selling. At its Monday low, it had erased half the gains from a 12-year bull rally that ran from 1999 to a record high near $2,000 an ounce in September 2011.

The slide was reminiscent of gold’s dramatic retreat in the second quarter of 2013, when prices fell nearly $200 in just two days in April, and another 11 percent in June. Since then, gold has largely underperformed even in the face of seemingly positive news. When concerns over Greece’s financial stability arose in the first half of 2010, gold rallied 13 percent. This year, as the prospect of Greece exiting the euro zone altogether hit markets, gold hardly moved. “There is an argument that gold hasn’t done a great job recently of protecting against financial market risks, and the US dollar has done a much better job,” Investec Asset Management portfolio manager George Cheveley said. “With the recovery in the US economy, this has led to a view that the dollar as a safe haven has re-emerged” at the expense of gold.

Data released last week showed hedge funds and money managers sharply reduced their expectation that gold contract prices on the US Comex market would rise, while holdings of the largest gold-backed exchange-traded fund fell to their lowest on Monday since September 2008. Gold’s recent retreat notwithstanding, in terms of its relative value to other assets, the metal is still looking overvalued. “If you look at how gold looks compared to oil or copper, or how it looks compared to US housing, for instance, none of these measures look particularly attractive for gold,” Barings’ director of asset allocation research, Christopher Mahon, said. “So not only do you have an environment that doesn’t work for gold-in other words, a fairly normal economic recoverybut the value isn’t there. It’s still relatively expensive compared to where it was in 2007, and it performs badly on days when you’d expect it to do well. None of it really adds up.”

Rate hike prospect
Potentially positive factors for gold have been outweighed this year by the prospect of the first U.S. interest rate hike in nearly a decade. Ultra-low rates helped push gold to record highs, but a rise in rates would make it less attractive to hold non-yielding bullion, while boosting the dollar. “We’re still in an environment where people are focusing on US interest rates,” Mitsui Precious Metals analyst David Jollie said. “There is definitely a search for yield, and commodities are just not in favor. That will limit the number of people who will come in.” Where once gold played a pivotal role, it now must compete for investors like any other asset. Gold historically was an integral part of the financial system, with the ‘gold standard’ pegging the value of a given currency to a set quantity of gold. The standard was steadily abandoned throughout the last century, and as European central banks sold their reserves throughout the 1990s, gold drifted towards 20-year lows.

The market turned around in 1999 after the central banks agreed to cap their sales, before surging during the financial crisis that kicked off in 2007. Prices jumped 30 percent that year, and averaged annual gains of 15 percent for the next five years. Gold attracted huge volumes of investment, which fund managers say saturated the market. Gold’s performance over the last five years has shown that it can sometimes fail to perform as either the steady store of value it proved to be in the 1990s, or as the appreciating asset it was in the 2000s. “Up until three years ago, gold as an investment asset came up in every client meeting,” Ashok Shah, investment director at London & Capital, said. “Now it only comes up with very longterm seasoned clients.” “A lot of clients have stopped doing long-term planning,” he added. “That has changed in favor of more illiquid investment ideas, typically private equity, real estate, in terms of farmland or commercial real estate. Gold has reduced its relevance even in long-term planning for a lot of people.” —Reuters

LONDON: Fragments of a Holy Quran manuscript found in a British university library are from one of the world’s oldest surviving copies of the Islamic text, and may even have been written by someone who knew Prophet Muhammad (PBUH), researchers said yesterday. Radiocarbon dating indicated that the parchment folios held by the University of Birmingham in central England were at least 1,370 years old, which would make them one of the earliest written forms of the Islamic holy book in existence. “They could well take us back to within a few years of the actual founding of Islam,” said David Thomas, Professor of Christianity and Islam at the university.

Researchers said the manuscript consisted of two parchment leaves and contained parts of surahs (chapters) 18 to 20, and was written with ink in an early form of Arabic script known as Hijazi. The university said for years it had been mis-bound with leaves of a similar Quran manuscript which dated from the late seventh century. The radiocarbon dating, said to have a 95.4 percent accuracy, found the parchment dated from between 568 and 645. Muhammad (PBUH) lived between 570 and 632. They were spotted by an Italian academic, Alba Fedeli, while conducting research for her PhD.

Fedeli said the leaves are from the same codex as a manuscript kept in the Bibliotheque Nationale de France in Paris, although that is currently dated a little later, to within 50 years of the death of Prophet Muhammad (PBUH). “(These fragments) give us glimpses into potentially how…the Quran might have been used in this early period and how it might have been recorded,” said Sajjad Rizvi, Director of the Institute of Arab and Islamic Studies at the University of Exeter. Thomas said the tests carried out on the parchment of the folios strongly suggested the animal from which it was taken was alive during the lifetime of Prophet Muhammad (PBUH) or shortly afterwards. “The person who actually wrote it may well have known Prophet Muhammad (PBUH). He would have seen him probably, he would maybe have heard him preach. He may have known him personally,” Thomas told BBC TV.

The manuscript was part of the university’s collection of 3,000 Middle Eastern documents which was acquired in the 1920s by Alphonse Mingana, a Chaldean priest born near Mosul in Iraq. His trips to acquire the manuscripts were funded by philanthropist Edward Cadbury, whose family made their fortune in chocolate, to raise the status of Birmingham as an intellectual centre for religious studies. “The parts of the Quran that are contained in those fragments are very similar indeed to the Quran as we have it today,” Thomas said. “So this tends to support the view that the Quran that we now have is more or less very close indeed to the Quran as it was brought together in the early years of Islam.” Muslim scholars said the discovery, along with similar recent finds and studies in Europe, would help academics piece together the development of the manuscript into its modern form. “The discovery of the written Quran dating back to the time of Muhammad (PBUH) may serve as an opportunity to make us reconsider the scholarly paradigm that Islamic culture is more oral-aural rather than visual,” said Hatsuki Aishima, a lecturer in Modern Islam at the University of Manchester.

The University of Birmingham said it would put the manuscript on public display in October, and Muhammad Afzal, chairman of Birmingham Central Mosque, said he expected it to attract people from all over Britain. “When I saw these pages I was very moved. There were tears of joy and emotion in my eyes,” he told the BBC. Birmingham is also a center of Islam in Britain, with about 20 percent of the city describing themselves as adherents of the faith. The planned display for the manuscript in October could prove a boon to the local economy, with adherents already expressing an interest in traveling to the city to see a piece of history.

Whilst some manuscripts are major attractions elsewhere in the world, their appeal to visitors is determined more by the status of the person who is understood to have recorded them. “The problem with this particular fragment is that we don’t actually know where it comes from,” Rizvi said. However, he said that the fragments would be studied worldwide if, in line with the recent trend for such finds, digital images were published on the Internet, and that there was potential for other significant discoveries in Britain. “The catalogues of which were in collections in Britain are not complete in most cases. It’s quite possible we might find some further things – even in the British Library itself.” “This is indeed an exciting discovery,” said Muhammad Isa Waley, lead curator for Persian and Turkish manuscripts at the British Library in London. “We know now that these two folios, in a beautiful and surprisingly legible Hijazi hand, almost certainly date from the time of the first three Caliphs. “According to the classic accounts, it was under the third Caliph, Uthman ibn Affan, that the Quranic text was compiled and edited in the order of surahs familiar today.” — Agencies

RIYADH: Saudi Arabia's Prince Saud Al-Faisal, who was the world's longest-serving foreign minister with 40 years in the post until his retirement this year, has died, the ministry spokesman said Thursday. He was 75. The tall, stately Prince Saud was a fixture of Mideast diplomacy, representing the oil-rich Gulf powerhouse as it wielded its influence in crisis after crisis shaking the region - from Lebanon's civil war in the 1970s and 1980s, through multiple rounds of Arab-Israeli peace efforts, the 1990 Iraqi invasion of neighboring Kuwait and the subsequent Gulf War, Al-Qaeda's Sept 11, 2001, attacks in the United States, the 2003 US-led invasion of Iraq to the current day's tensions between the Arab Gulf bloc and Iran, Arab Spring uprisings, Syria's civil war and the spread of Islamic State group extremists.

The country's government-owned media announced Saud's death after midnight yesterday. The official announcement, carried by state television, did not state the cause of death. The prince had undergone multiple surgeries in recent years for his back, which left him walking with a cane, and for other ailments. Word of his passing first emerged late Thursday when Saudi Foreign Ministry spokesman, Osama Nugali, wrote on his official Twitter feed, "The eye tears, the heart saddens. We all are saddened to be separated from you."

The prince, who took the ministry post in 1975, retired on April 29, citing health reasons. At the time, US Secretary of State John Kerry hailed him, saying he "has not just been the planet's longest-serving Foreign Minister but also among the wisest." He was succeeded in the post by Adel Al-Jubeir, who before that was Saudi Arabia's ambassador in Washington. Kerry expressed his condolences to Saud's family and friends, King Salman and to the people of Saudi Arabia, saying the prince was "a man of vast experience, personal warmth, great dignity, and keen insights who served his country loyally and well." "I personally admired him greatly, valued his friendship, and appreciated his wise counsel," Kerry added. "His legacy as a statesman and diplomat will not be forgotten."

President Barack Obama said in a statement that generations of US leaders and diplomats benefited from Saud's "thoughtful perspective, charisma and poise, and diplomatic skill." Saud was the son of Saudi Arabia's third king, Faisal, who ruled from 1964 until he was assassinated in 1975. Prince Saud, who had a bachelor's degree in economics from Princeton University and had been deputy petroleum minister, was soon after appointed to the foreign minister post, which his father had held during his reign.

The young prince, fluent in English and French, brought an air of sophistication and charisma, whether in crisp suits or in the traditional Saudi white robe and gold-trimmed black cloak with a red-checkered head piece. Soft spoken, he often showed a sense of humor not often seen among the publicly stolid royal family. He was father to six children, three boys and three girls. King Salman's son, Prince Sultan, is married to one of Prince Saud's daughters. The late prince's brothers are also known as highly educated and eloquent, with Prince Khaled Al-Faisal serving as the governor of Makkah and another brother, Prince Turki Al-Faisal, heading a research center and think tank after decades as the head of intelligence.

Mamoun Fandy, author of Saudi Arabia and the Politics of Dissent, said his death marks the end of an era as the elder royals move to shift power to younger princes. "The history of Saudi foreign policy is Al-Faisal, both him and his father," he said. "It's how the world knew Saudi Arabia, through Al-Faisal." Arab League Secretary General Nabil Al-Arabi said the world lost a "noble" diplomat who defended his nation with "courage and valor." Iyad Madani, the secretary general of the Organization of Islamic Cooperation, the world's largest body of Muslim nations, said the prince fought major political battles in his career for the sake of his country and for the Muslim world.

He led Saudi diplomacy over a period that saw the kingdom - once better known for behind-the-scenes influence - become more overt in throwing its weight in affairs across the Mideast. Tending to the alliance with the United States was a major part of that. Saddam's invasion of Kuwait brought US troops to Saudi Arabia, a deployment that raised some opposition among Saudis. Al-Faisal played a key role in patching ties with the United States which were strained by the Sept 11, 2001 attacks, in which 15 of the 19 hijackers were Saudi nationals.

He insisted in public speeches that Islam and Muslims are not the enemy, saying in 2004 in an address at the European Policy Center in Brussels: "You just cannot dismiss a 1,400-year-old culture and civilization by stigmatizing it as merely a hatchery for terrorism." After the 2003 US-led invasion of Iraq ousted Saddam, Saudi Arabia often bristled over the consequences - the rise of Shiite power in Baghdad and the growing influence there of Shiite-led Iran, the kingdom's top rival. Saud "had to explain to the world how they hated Saddam Hussein, but objected handing over Iraq to Iran," Fandy said.

Al-Faisal was not seen as a hawk toward Iran, but was part of the leadership that saw the Shiite powerhouse across the Gulf waters as the main challenge to Sunni-led Saudi Arabia. Last year, he invited Iranian Foreign Minister Mohammad Javad Zarif to visit Saudi Arabia, but later accused Iran of fomenting unrest throughout the Middle East. Zarif ended up visiting shortly after King Abdullah's death in late January and expressed hopes of greater co-operation with the Sunni-ruled kingdom.

Among the stories shared about the prince by Western diplomats in Riyadh is that at one point, he had approached King Abdullah to ask to retire as foreign minister, saying he was tired and needed to rest. The monarch declined his request, telling him, "So I should be the only one to die in office?" In one of his last public appearances as foreign minister in March, he helped rally efforts for Saudi Arabia to lead a coalition of Arab countries to bomb Yemen's Shiite rebels who had taken over the capital there. "We are not warmongers, but if the drums of war call for it, we are prepared," Saud said in a speech to the kingdom's consultative Shura Council, arguing that Yemen was integral to overall Gulf security and that Iran was behind the rebels.- AP

ADEN: Saudi-led warplanes launched dawn raids Saturday against Shia rebels in Yemen's southern port city of Aden, the military said, hours after peace talks in Geneva ended without agreement.

At least 15 air strikes rocked the northern, eastern and western approaches to Aden, said a pro-government military source.

“The objective is to close the noose around the Houthi rebels in Aden and assist the popular resistance committees,” loyal to exiled President Abedrabbo Mansour Hadi, the source said.

He said the rebels shelled several Aden neighbourhoods, killing four people and wounding several others, a toll confirmed by hospital officials. The violence came hours after the UN's special envoy for Yemen, Ismail Ould Cheikh Ahmed, announced Friday in Geneva that talks between the warring sides ended without agreement.

“I won't beat around the bush. There was no kind of agreement reached,” the Mauritanian diplomat told reporters in the Swiss city.

The rebels, backed by fighters loyal to ousted president Ali Abdullah Saleh, have overrun much of the Sunni-majority country, challenging the government's legitimacy and prompting Abedrabbo to flee to Saudi Arabia. A coalition led by the oil-rich Gulf nation has carried out air strikes against the Houthis and their allies since March 26.

More than 2,600 have been killed in the fighting which has also left 80 percent of the population — 20 million people — in need of urgent humanitarian aid, according to UN estimates.

Aid groups and the UN say a dire humanitarian crisis is unfolding, and have appealed on all sides to stop fighting to allow them to move supplies to Yemen and distribute them to the needy.

The situation is particularly tragic in Aden, where residents have complained of food and water shortages, while medics speak of a rapidly deteriorating health situation and the spread of disease.

A boat laden with supplies, including flour, that was due to dock in Aden this week had to divert course to Hodeida in western Yemen due to the fighting, Aden's deputy governor Nayef al-Bakri said.

Bakri accused the Huthis of deliberately forcing the vessel, chartered by the UN's World Food Programme, to change course to Hodeida where they control the port to punish the people of Aden.

“They want to deprive Aden's residents, who have been resisting their presence, from this aid,” he said.

RIYADH: Muslims around the world marked the start of Ramadan yesterday, a month of intense prayer, dawn-to-dusk fasting and nightly feasts. Muslims follow a lunar calendar and a moonsighting methodology that can lead to different countries declaring the start of Ramadan a day or two apart.

However, this year religious authorities in Saudi Arabia, Egypt, Iran, Indonesia and most other parts of the world announced based on their sightings of the moon that daily fasting would begin yesterday. Authorities in Pakistan have yet to announce the sighting of the moon.

During Ramadan, observant Muslims abstain from eating and drinking from sunrise to sunset for the entire month. A single sip of water or a puff of a cigarette is considered enough to invalidate the fast. The fast is intended to bring the faithful closer to God and to remind them of the suffering of those less fortunate. Muslims often give to charities during the month, and mosques and aid organizations organize free meals for the public every night. Fasting also is seen as a way to physically and spiritually detoxify through exercising self-restraint.

Sexual intercourse between spouses also is off-limits during the day, while Muslims also are encouraged to be mindful of their behavior and to avoid gossiping, cursing and quarreling. This year, Ramadan falls during the summer, which means long and hot days of fasting. Mainstream scholars advise Muslims in northern European countries with 16 hours or more of daylight to follow the cycle of fasting of the nearest Muslim majority nation to them to avoid impossibly long hours without food or water.

Chairwoman Pia Jardi at the Finnish Muslim Union in Helsinki said Muslims there will be fasting for 21 hours and have just three hours - or even less - for eating, drinking and prayer before the sun rises again. “The good thing is that you’ll eat with moderation and that you’ll stick very much into the true, simple spirit of Ramadan,” Jardi said. “Long fasting time means you rarely want to eat heavily.” In a statement, President Barack Obama and his wife Michelle extended their “warmest greetings to all those observing the month of fasting in the United States and around the world.”

The world’s 1.6 billion Muslims traditionally break their fast like the Prophet Muhammad did around 1,400 years ago, with a sip of water and some dates at sunset. Then family and friends gather for a large feast. Part of the evening is often spent at the mosque in prayers called “taraweeh.” Children, the elderly, the sick, women who are pregnant or menstruating and people traveling are not obligated to fast. Non- Muslims or adult Muslims not observing the fast who eat in public during the day in Ramadan can be fined or even jailed in some Middle Eastern countries, such as Saudi Arabia and the United Arab Emirates, home to large Western expatriate populations in Dubai and Abu Dhabi. Fasting during Ramadan is one of the five pillars of Islam, along with the Muslim declaration of faith, daily prayer, charity and performing the hajj pilgrimage in Mecca. Muslims celebrate the end of Ramadan with a three-day holiday called Eid Al-Fitr. — AP

DOHA: A senior US envoy said yesterday the growth of the Islamic State militant group had global implications and could “wreak havoc on the progress of humanity” if unchecked. Retired Gen John Allen, appointed by US President Barack Obama to build a coalition against Islamic State, told a conference in Qatar the group was not merely an Iraqi problem or a Syrian problem but “a regional problem trending towards global implications”. The group has lost about a quarter of the populated areas it once held in Iraq, but countering its ideology might take a generation or more, he told the Brookings Institution’s US-Islamic World Forum.

Last month, the Iraqi government had its worst military setback in nearly a year when Islamic State seized Ramadi from a weakened Iraqi army. The capital of the overwhelmingly Sunni Muslim province of Anbar is 90 km west of Baghdad. Since then, government troops and allied Shiite Muslim militia have been building up positions around Ramadi. Many Iraqi Sunnis dislike the ultra-hardline Islamic State but also fear the Shiite militias after years of sectarian strife.

Allen said there was no future for Iraq without Sunni support and stressed the need for the government to control the Shiite militias, some of whom have links to Iran. “We said many times that it is critical that all forces in the battle field must be under the command and control of the government of Iraq for the counter-ISIL operation to be successful,” he added, using a common acronym for Islamic State.

Washington remained “very attentive and concerned about extremist militia elements frequently influenced by Iranian leadership, where Iran may play a significant role in their presence,” he said. He added that Turkey’s borders with Syria and Iraq were the “last line of defense” against foreign fighters coming into the conflict - but other countries also needed to help stop the influx. Syrian President Bashar Al-Assad should have no place in a solution to Syria’s war, he added, repeating Washington’s stance on efforts to end the fighting.

Over 10,000 killed
Meanwhile, more than 10,000 jihadists have been killed in air strikes against the Islamic State group over a nine-month coalition campaign, US deputy secretary of state Antony Blinken said yesterday. “We have seen enormous losses from Daesh (IS), more than 10,000 since the beginning of the campaign and this will end up having an impact,” Blinken told French radio, without specifying whether the losses were in Iraq or Syria. Blinken was speaking a day after an international conference in Paris in which 20 or so representatives of the anti-IS coalition pledged support for Baghdad’s plan to claw back territory from the marauding jihadists who have conquered large parts of Iraq and Syria.

The coalition’s strategy has been criticized for relying on air strikes without committing boots on the ground, but Blinken stressed there had been “significant progress”. Islamic State now controls “25 percent less of Iraq after nine months, a lot of their equipment has been destroyed and many Daesh members have been eliminated,” said Blinken. He nevertheless acknowledged the “resilience” of the group after the coalition has launched about 4,000 air strikes on them. In a separate French radio interview, Iraq’s ambassador to France, Fareed Yasseen, said the allies had heeded Baghdad’s calls for more weapons to combat the group. “The Americans have promised us and will shortly deliver missiles that will make the difference against these truck bombs ... which made us lose Ramadi,” a key Iraqi city close to the capital. “The French will be giving us similar weapons, ammunition and we are discussing other cooperation projects,” the ambassador told Europe 1 radio.—Agencies

 

BEIRUT: The Islamic State group seized territory from both Syrian government forces and rival rebels over the weekend further expanding the caliphate it has proclaimed straddling Iraq and Syria. The Syrian Observatory for Human Rights said that following gains in both Homs province in the centre and Aleppo province in the north, IS now controlled half of the country’s land area.

Geographer and analyst Fabrice Balanche said that across Iraq and Syria, the jihadist group now controlled nearly 300,000 square kilometres (115,000 square miles), an area the size of Italy. In Aleppo province-on Syria’s border with Turkey- IS has expanded its control at the expense of rival rebel groups. IS captured the village of Suran on Sunday taking them to within 10 kilometres (six miles) of the border, the Observatory said.

Three days of heavy fighting left 30 IS fighters and 45 rival rebels dead, the Britain-based watchdog said. Yesterday, the group advanced towards the town of Marea, which lies on a key supply route from Turkey for its rebel opponents. IS previously targeted Marea in April, detonating two car bombs and killing 15 rebel fighters, but it was unable to take the town. In central Syria, IS ousted government forces on Saturday from a strategic crossroads south of the ancient oasis city of Palmyra.

The checkpoint and nearby village of Basireh lead south to Damascus and west to Homs, as well as east to IS-controlled areas of Iraq. “The road is now open (for IS) from Palmyra to Anbar province in Iraq, without any obstacles,” said local activist Mohammed Hassan al-Homsi. IS overran Palmyra on May 21 after a bloody advance across the desert from their stronghold in the Euphrates valley to the east. The city’s fall came hot on the heels of the jihadists’ capture of Anbar provincial capital Ramadi from Iraqi government forces.

That defeat forced Baghdad to call in Iran-backed Shiite militia forces to the predominantly Sunni province in a move that risks complicating its efforts to win the population back from the Sunni extremists of IS. An Iranian officer was killed last week while advising Iraqi forces on their campaign to recapture Ramadi, Iranian state media reported yesterday. In northeastern Syria, IS has advanced to within two kilometres (little more than a mile) of the provincial capital of Hasakeh, the Observatory said. Yesterday, “an IS fighter blew himself up at a progovernment checkpoint near Hasakeh, killing at least nine regime loyalists,” it added.

Syria’s ‘unwinnable’ war
Syrian government forces have proved increasingly unwilling to fight IS in areas that are regarded as marginal. For the regime, “the territories that are vital to protect... are Damascus, Homs, Hama, and the coast,” a security source said. Observatory director Rami Abdel Rahman said the government was suffering from a severe shortage of military personnel both because of heavy battlefield losses and because of difficulties recruiting replacements. “The armed forces and pro-government militia are unwilling to fight in areas where the local population isn’t also fighting,” he told AFP. In particular, soldiers were hesitant to get involved in areas with a Sunni Muslim majority, compared to those which are largely Alawite-the offshoot of Shiite Islam to which President Bashar al- Assad belongs.

A pro-regime Facebook page publishing news from the Assad heartland of Latakia lamented the “thousands of martyrs and wounded” that coastal provinces had suffered during the war, demanding that other areas take up arms so that minorities would not carry the burden alone. Analyst Aron Lund said that IS and its Syrian government and rebel opponents were engaged in a bloody multi-front war in which there would be no winners. “Cities will be taken and retaken, and battles will be won and lost, until we all lose track,” he said. “But you cannot win a war like Syria’s any more than you can win a plague or an earthquake.” — AFP

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