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Showing posts with label PM. Show all posts
Showing posts with label PM. Show all posts

Tuesday 2 July 2019

Investors parking funds into Gold

Gold is on a winning streak, shining brighter than before. Investors, households, traders and central banks around the globe are parking cash in it. Gold has rallied its highest in the last six years in the international market. In India, it hit it’s highest ever on June 25. In one month, gold has gained 12% and it appears the Bull Run for the yellow metal will last longer than one thought.

Gold prices have surged to the highest since 2013 as the U.S. and the global economy slow and due to the likelihood of a return to ultra-loose monetary policies. Rising geopolitical tensions in the Middle East and between an aligned Iran, Russia and China versus the U.S. is also leading to safe haven demand. U.S.-Iran relations have deteriorated sharply whereby war has become a very real possibly alas.


Monetary policies - The US Federal Reserve, the country’s central bank, did what many expected last Wednesday, and held interest rates steady while signalling that a rate cut is on its way. Now, meaning no change to the 2.25% to 2.5% range on the federal funds rate. Nine of 10 FOMC members voted to keep rates unchanged. The Fed reportedly dropped its pledge to be “patient” on widely anticipated rate cuts, meaning it could be poised to act. Also, Reuters said, Fed Chair Jerome Powell stopped referring to below-target inflation as “transient”. Reading between the lines gold traders took the message and ran with it, with the precious metal’s price hitting a five-year high.

Economic slowdown - Macroeconomic growth is falling all over the world. Joblessness is not peculiar to India, jobs are falling across the globe and investors are not comfortable opening their purse strings due to the uncertain economic and political environment. Hence, the cash will be parked in the safest haven, the value of which could possibly never come to zero.

US-China trade war - The other reason for gold being on a tear is the risk of the ongoing trade war spiralling into a currency war. If that happens, gold will turn into a bigger monetary asset, it will gain further.4he likelihood of more central banks joining in the race to buy gold will increase with the increase in anxiety about an uncertain future. Gold will also play as the most important asset class as global risks in equity markets rise.

Geopolitical tensions - Concerns arising out of mounting trade war and geopolitical tensions between the US and Iran have added to the dollar weakness and therefore lending an extra shine to gold. On June 25, gold hit its highest in six years, selling at Rs 35,800 per 10 grams, clawing back to 2013 level when it had touched the highest due to government’s desperate measure of an unprecedented import duty hike on the yellow metal

The result was an immediate jump in the gold prices. The rise in gold futures was even more dramatic, with gold for delivery in August rocketing to a fresh high $1,366.60. The last time bullion was priced that high was just over five years ago.

Weak Dollar - gold prices share an inverse relation with the dollar. When the dollar, the world’s most powerful currency loses shine, gold takes over from there. In the month of June, it shined the most, boosted on the back of a weakness in the dollar after the US Federal Reserve signalled it would cut interest rates, going forward, as the US economy was sagging.

Trade, economic and geopolitical uncertainty have seen safe-haven demand return and pushed prices higher.

Apart from this news what made headlines was the G20 summit which ended with a lot of positives and negatives.
Positives- Finally the US and China formally agreed for a re-talk of their completely stopped talks 6 weeks ago.

Negatives - Trump looked desperate for any kind of deal with China, which compelled markets to believe that there is some kind of deterioration of the US economy.  This happened following his face-saving comment on Huawei and later Kudley clarified that there is no big relief for this Chinese company.

His visit to the North Korean border didn’t go down well with the markets.
Some important numbers that market will track in the week are-
China Manufacturing PMI
US Manufacturing PMI

The month ended with a lot of glitters for gold as it claimed 6 years high of $1422 and is expected to see big ranges this week if there some kind of news coming in  from
Economic data
Trump
China

Based on the futures markets we can say that if gold crosses 34005 then we can expect a rally of 34250- 34400. If it drops below 34005 then e can expect a further fall between 33875 to 33625.

Monday 5 December 2016

The Most Awaited Fed Meet Of The Year Keeps Markets Alert

Gold had rebounded somewhat last week although it remained below its psychologically important level of $1,200 per oz, suggesting that sentiment has not materially improved.

Gold came off its earlier lows but remained weak during Friday morning trading on December 2 – the near-certainty of a US interest-rate rise this month and an exodus of ETF investors put downward pressure on the market.


The spot gold price was seen trading at $1,176.45/1,176.65 per oz, up $3.35 on Thursday’s close. The metal fell on Thursday to its cheapest since February this year at $1,160.80 per oz.

Market was mainly focused on the US jobs reports, numbers of which would be an important deciding factor for the rate hike. The report was expected to show that 177,000 new non-farming jobs were added in November and unemployment rate forecasted at 4.9%.
Once the number Swere out gold came under pressure. Let’s have a look at the important data released-

  • On Thursday, US final manufacturing PMI in November bested economic consensus at 54.1 – 53.9 was called for. 
  • ISM manufacturing prices and PMI for November both topped projections at 54.5 and 53.2, respectively.
  • October construction spending, however, came in at 0.5% month-on-month, a touch below the 0.6% prediction, while weekly unemployment claims were at 268,000 last week, which was above consensus of 252,000.
  • On Friday non-farm payroll numbers showed that the USA added 178,000 jobs in November, against earlier expectations of around 165,000 and from October’s figure of just 161,000. In addition, unemployment dropped to 4.6% and wages climbed by 2.5%.


The recent spate of positive data is expected to produce higher rates when the US Federal Open Market Committee (FOMC) meets on December 13-14 – market participants see a 95% chance of a rate hike during the meeting, according to the CME FedWatch Tool.

The Asian physical market has picked up a little thanks to favorable seasonality and a fall in domestic prices. This should limit the downward pressure on international gold prices

This week, gold looks a little stronger because macro drivers have become slightly more favorable for precious metals from a weaker dollar and lower US real rates.
The gold price glided lower during Monday December 5 trading as its earlier push higher failed to hold and it slipped into negative territory.

The yellow metal had found support from its safe haven status after Italian Prime Minister Matteo Renzi was defeated in Sunday’s referendum.

The US Federal Open Market Committee (FOMC) will meet on December 14 – many participants expect an interest-rate rise to be announced, particularly after a run of positive data from the USA.

As of now, gold remains vulnerable ahead of the Fed meeting on December 13-14. Any stronger-than-expected US data is likely to raise the probability that the Fed lifts rates soon, pushing the dollar and US real rates higher, and in turn exerting downward pressure on the gold price.

Saturday 12 November 2016

#SaluteModi : RSBL



This was one of the boldest movements by the Government of India announced over a 40-minute speech. In one of the historical reforms of the economy of India, Rs 500 and Rs 1,000 notes were banned effective Tuesday midnight which is expected to bring in 7 lac crore in the RBI account.
The entire team at RiddiSiddhi Bullions ltd. supports this brave move of Our Respected PM Mr. Modi. We assure complete support for the successful implementation of these measures to fight corruption and illicit financial flows in India.  The majority of industry and commoners alike reacted to this decision with overwhelming support and we at RSBL will extend total cooperation for it. Our aim is to have a "black money free India".