Gold prices Rise: RSBL

                                                       - Mr. Prithviraj Kothari, MD RSBL

                           

 
Just when Gold was raising questions on its recent rally, last week’s labour report proved to be a saviour for the yellow metal. Gold prices traded sharply higher in Friday thus giving a technically bullish weekly high close to gold.

In May, the US non-farm workforce grew up only 38,000, missing the forecast of 160,000 and indicating that the US recovery may be starting to slow. Additionally, the March and April figures were revised 22,000 and 37,000 lower respectively while growth in average hourly earnings last month of 0.2 percent was below the predicted 0.3 percent. The Labour Department report released Friday showed employers added jobs in May at the slowest pace since 2010 as unemployment dropped to 4.7 percent, already reaching the level Fed officials expected to see by the end of 2016. Apart from disappointing headline NFP (nonfarm payrolls) number, there is a also a sharp jump in involuntary part time workers.

A much-weaker-than-expected U.S. jobs report prompted the yellow metal to surge higher, and those initial solid gains have been extended to show gold trading over $30 higher on the day. A sharp drop in the U.S. dollar index also helped push gold prices higher.

A broad slowdown is troubling for the Federal Reserve, which has grown increasingly hawkish in recent weeks following the April meeting minutes, giving their support to a rise in interest rates as early as this month if data warranted such a move. But a negative jobs report has once again left the markets perplexed per se the rate hike.

Considering the pliability of the US economy, has once again raised some questions about the momentum of growth and about the outlook. This in turn takes June off the table for a Fed hike.

Apart from the current news what needs to be watched this week for gold are:

1. THE MAIN EVENT: Fed Chair Janet Yellen's speech today at 10.00 pm.  
2. Central Bank (Rate Cut) Watch:

• Reserve Bank of Australia (June 7) no change expected
• Reserve Bank of India (June 7) no change expected
• Reserve Bank of New Zealand (June 9) 0.25% rate cut expected

Sentiments for gold are bullish and the major turning pint for this sentiment is the US dollar. Gold could remain in rally mode through the coming week as traders reassess their U.S. dollar and Fed outlook.

Thank You!

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The primary purpose of this article by Mr. Prithviraj Kothari is to educate the masses of the current happenings in the Bullion world.

Previous blog –

" INTEREST RATE HIKE SPOILING GOLD PRICE RISE :RSBL" - http://riddisiddhibullionsltd.blogspot.in/2016/05/interest-rate-hike-spoiling-gold-price.html

RSBL launches RSBL SPOT APP – Live Gold, Silver, Platinum prices at your Fingertips!

                                                   By Mr. Prithviraj Kothari, MD, RSBL

To know the price of Gold or Silver coin, a common man of India faces ever intriguing questions whether is this best price available in the market? Is the Jeweller charging me more? Will I get a better deal from some other Jeweller? If the price is fixed, the questions arises, Are the goods pure? Can I trust the brand?

Questions, Questions and only Questions to invest in what you love, trust and depend in the times of uncertainty i.e. Gold & Silver. To solve these questions, RSBL is glad to launch RSBL SPOT app on iPhone and Android compatible phones for one and all. A unique app that gives a user an access to Gold, Silver and Platinum live transparent benchmark prices across India!

RSBL SPOT is spread over 18 centers across India and the RSBL SPOT app user would get benchmark two way Buy/Sell quotes of more than 40 Symbols of Gold, Silver and Platinum which includes coin prices too across Indian markets. An app that gives an investor an edge while investing in Gold, Silver or Platinum.

Other special functions:

1. Live international Gold and Silver prices.
2. Gold Symbols with 995 or 999 purity in various denominations while Silver symbols available in 999 purity
3. Live rates on home screen via Widget (Android compatible phones only), even when the app is closed.
4. By registering yourself for free, you can insert price alerts. 
5. Live charts
6. News updates on Bullion industry, 
7. Blogs, 
8. Economic Calendar
9. Videos and so on.

Attaching some screenshots:

RSBL SPOT 

Home Screen

Symbols can be added/removed

Can be used even when RSBL SPOT
 app is closed

Live News

Economic Calendar

RSBL Spot is India’s leading platform for online physical bullion and coins sales with delivery centres spread across the country. RSBL Spot prices are transparent, two-way and continuous. They are the benchmark prices for majority of dealing by all jewellers.

RSBL Spot has revolutionized the bullion trading system in the spot market and is done at par convenience. Its objective is to maintain and improve its market leadership in providing customers with the most effective prices for dealing and physical delivery of gold and silver.

RSBL SPOT app comes with features that are never seen before! Make the most of this opportunity! 


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RSBL: Gold & Silver prices rise

                                                                           By Mr. Prithviraj Kothari, MD, RSBL

Last week we saw gold prices setting to 15 month high on Friday.

This surge in prices was influence by nervous stock markets which raised gold’s safe haven demand. Currently A confluence of monetary and financial factors is supporting gold prices.

A solidly lower U.S. dollar index that hit an eight-month low Friday and Nymex crude oil prices that notched a five-month high are bullish "outside market" forces that are also propelling gold and silver prices higher.

On Wednesday, the US Federal Reserve continued its historically low nominal interest rates and didn’t signal to markets that another rate hike was forthcoming. We saw increased uncertainty in the markets on Thursday, one day after the Fed’s policy statement came out, but the Fed’s reflections had little to do with the market movements.

While in the US, unemployment claims hit a 42-year low of 247,000, which easily beat the 257,000 forecast. But US GDP increased by a 0.5-percent annual rate in the first quarter, the slowest pace since the first quarter of 2014 and below the 0.7-percent consensus estimate.

This paradox of a strong jobs market with tepid GDP growth has put the Federal Reserve in a bind. In its April statement released, the Fed decided to maintain near-zero interest rates despite noting that global risks had eased over the last several weeks.

Investors aren’t expecting the Fed to raise rates anytime soon with a majority of investors citing December as the most likely time for the Fed to rise rates again, according to the CME Group Fed Watch.

Additionally, the Bank of Japan’s (BOJ) shocked markets Wednesday by deciding to keep its monetary policy unchanged.

Now what needs to be watched is the action coming in for gold from the sidelined factors. Moreover what needs to be assessed is how the dollar will behave this week since currency continues to be the predominant driver in most commodity markets for the moment.

Thank You!

You may follow me on:

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The primary purpose of this article by Mr. Prithviraj Kothari is to educate the masses of the current happenings in the Bullion world.

- Previous blog -
 "BEST QUARTER FOR BULLION SINCE THREE DECADES: RSBL"
http://riddisiddhibullionsltd.blogspot.in/2016/04/best-quarter-for-bullion-since-three.html

Photo courtesy: Google search

BEST QUARTER FOR BULLION SINCE THREE DECADES: RSBL

By Mr. Prithviraj Kothari, MD, RSBL

Gold, one of this year’s best performing assets, has room to extend its advance, according to top-ranked forecasters, even as the rebound shows signs of losing steam.

While we see gold being one the best performing asset in its class in 2016, we also this year to be one of the best performing years for gold in the past 3-4 years.

Bullion had its best quarter in almost three decades through March after the metal regained its haven status amid volatile financial markets, the spread of negative interest rates and as the Fed pared back expectations of further rate increases. Holdings in exchange-traded funds have climbed about 20% this year and there appears to be a return of confidence.

While gold has strengthened since the start of the week, putting an end to last week’s selling pressure, it has underperformed the rest of the precious metals as speculative positioning is overstretched on the long side

When markets are volatile and sentiments are confusing, we see more than ne factor influencing the prices. The same has happened with gold. This week there was more than one factor that as responsible for the ups and downs in gold. Let’s have look at each of these individually.

ETF- In paper holdings, gold ETF’s tracked by Fast Markets remain near their 2016 high – stood at 1,806 tonnes as of April 21. Investors poured $13.6 billion this year into exchange-traded products tracking precious metals, data compiled by Bloomberg show. That’s almost 80% of the total inflows into commodity ETFs in 2016. This gave a boost to gold prices.

ECB- On Thursday, the outcome of the European Central Bank meeting was as expected when it kept its current monetary programme unchanged.

The gold price was relatively flat during Asian trading hours on Friday after the European Central Bank (ECB) kept its monetary policy unchanged at its Thursday meeting as expected.

Spot gold was last at $1,250.00-1,250.20 per ounce on Friday, up just $0.50 from Thursday’s close.

But ECB president Mario Draghi warned that deflationary signals remained despite negative interest rates and billions of euros in asset purchases, while economic growth stays “tilted to the downside”.

In March, the central bank lowered nominal interest rates further into the zero-bound, citing concerns of deflationary pressure and a divergence between the northern and southern economies.

Dollar- Gold held its ground despite a stronger US dollar following the unexpected fall in US unemployment figures. With ECB policymakers holding interest rates unchanged, there was little to excite investors,” said ANZ Research on Friday morning.

The US dollar index had recovered to a three-day high of 94.70 on Thursday, but slipped 0.15 percent to 94.49 so far on Friday

Gold futures dipped Friday morning in the US, with a strengthened dollar and increased risk tolerance combining to weigh on prices.

US Report- in US data released Thursday, weekly unemployment claims between 7-14 April came in at 247,000 below the forecast of 265,000 and the lowest since November 1973.

The Philly Fed manufacturing index, however, was at 1.6, a stark divergence from the 8.1 estimate. The CB leading index month-over-month in March slipped to -0.2 percent, off the estimate of a 0.4 percent uptick.

Other markets- demand concerns in China and emerging markets weighed on global growth.

Earlier, Japan’s reading came in at 48, below the previous figure of 49.1, while PMIs from across the Eurozone were mixed.

Turning to International markets, Germany’s DAX and France’s CAC-40 were down 0.6 percent and 0.5 percent respectively, while the dollar strengthened 0.4 percent to $1.1253 against the euro.

While the current risk-on environment – evident in stronger equities and lower volatility – is exerting downward pressure on safe-haven demand, bullish factors like a weaker dollar and stronger oil price continue to prevail.

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The primary purpose of this article by Mr. Prithviraj Kothari is to educate the masses of the current happenings in the Bullion world.

- Previous blog -

"Why Gold Is Sill Cheap" 

http://riddisiddhibullionsltd.blogspot.in/2016/03/rsbl-why-gold-is-still-cheap.html 

RSBL: Why Gold is still cheap?

                                                                             By Mr. Prithviraj Kothari, MD, RSBL

Before jumping onto the main topic, I would like to essay out some facts about Gold prices this year. (Assuming Silver prices have more or less followed Gold prices). I am sure; lot of people would be feeling that US$60 is a big decline for Gold prices in the recent weeks and few would even have increased their bearish bets against the precious metal. I must warn them by quoting that even after the recent decline; the precious metal is nearly 16% up from its lows.

Then why there is a decline?

1.  The U.S. central bank surprised markets last week by cutting its rate hike projections more than expected, down from four to two in 2016, citing the potential impact from weaker global growth and financial market turmoil on the U.S. economy. This led to a rally in the U.S. dollar index and in turn bearish for the metal.

2.  There was a brief safe haven status which Gold gained due to the attacks in Brussels.

3.  Throughout the last week various Fed members including Patrick Harker, the Philadelphia Fed president,  have come out in support of raising interest as soon as April – if the economic conditions were to move.

4.  One more reason is the Easter Holidays, where I would see the profit booking in the Gold prices is quite understandable.

Now coming to the main topic: Why Gold is undervalued according to me?

1.       Reducing the number of rate hikes from 4 to 2, clearly states that FED isn’t sure how the world economy would fare in the longer run. Even when US economy has been showing some positive economic numbers, they are unable to take the most obvious step and when the inflation picks up faster than the central bank expects, they would have to increase the rates quickly.

2.       A dovish Federal Reserve, a weaker U.S. dollar and negative real interest rates will all be positive for gold this year. Over the recent years, the most dominant driver for gold prices has been the direction of the US dollar. As we are now expecting a lower dollar over the coming years we expect it to play a crucial role in the movement of gold prices. As for the Fed the analysts say that even if the Fed does raise interest rates later this year -- a scenario they see as unlikely -- they will be perceived as being behind the inflation curve high will once again be a pushing factor for gold prices as investors will likely buy gold because of lower US real yields and as some may see gold as a possible inflation hedge.

3.      There are lot of crucial political events this year:

a.   Current leadership crises in Brazil

b.  US presidential election in November

c.   U.K’s June vote over its membership in European Union.

All of them would leave a lasting effect if they go against the market.

4.      Terror threat across Europe, Syrian conflict and other Geopolitical tensions will always make Gold has the safest investment during the turmoil.

5.       Moody’s Investors Service highlighted China’s surging debt burden in lowering the nation’s credit-rating outlook to negative from stable earlier this month.

6.       We are in a tug of war between slow growth and high valuations on one side and central bank stimulus on the other.

Looking at the renewed turmoil in financial markets by highlighting the Fed’s policy divergence with the ultra-easy stances of the ECB and Bank of Japan, the near future seems bright for gold. 

Thank You!

You may follow me on:

      Facebook: https://www.facebook.com/prithviraj.kothari
         Twitter: https://twitter.com/prithvirajrsbl
        Website: http://www.rsbl.co.in/
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       Google+: http://www.google.com/+PrithvirajKothari


The primary purpose of this article by Mr. Prithviraj Kothari is to educate the masses of the current happenings in the Bullion world.

- Previous blog -
 "Brussels explosion and Gold's Safe haven appeal: RSBL"
http://riddisiddhibullionsltd.blogspot.in/2016/03/brussels-explosion-and-golds-safe-haven.html

Photo courtesy: Google search