Pages

RSBL Gold Silver Bars/Coins

Showing posts with label dollar. Show all posts
Showing posts with label dollar. Show all posts

Saturday 30 January 2016

BEST PERFORMING MONTH FOR GOLD SINCE JAN 2015: RSBL


By Mr. Prithviraj Kothari, MD, RSBL





Recent years have seen countless claims that gold and silver prices have to head far lower, implying demand is low or supply is high.  But the actual data continues to prove this false, showing precious-metals bearishness is rooted in sentiment and not fundamentals.

Currently market sentiments for the yellow metal are bullions over the month for January as the global equities routs and a growth discomfort spurred gold prices nearly five percent – the biggest monthly gain in a year.


Gold prices headed for their best monthly rise in a year on Friday, slipping back to $1110 per ounce as world stock markets gained, but trading 4.6% higher from the start of 2016. This was gold's best monthly gain in Dollar terms since January 2015.

This year where on one side we saw the global equity markets began with a major sell off the yellow metal has given its best signal months performance since January 2015- as it rose 4.9per cent this month. Gold had hit a 12-week high of $1,128.20 during US trading on Wednesday and has since eased on profit-taking.

The gold price inched higher during Asian trading hours on Thursday supported by market uncertainties, as well as expectations of slower future Fed rate hikes.

Gold edged higher on Friday after U.S. data showed economic growth decelerated sharply in the fourth quarter and the price of the precious metal was on track for its biggest monthly rise in a year after global economic headwinds hit riskier assets.


Data released was as follows:

  • Fourth quarter advance GDP came in at 0.7 percent, missing the forecast of 0.8 percent. GDP Price Index stood at 0.8 percent versus the estimate of 1.2 percent.
  • Revised University of Michigan Consumer Sentiment was at 92.0, below the projection of 93.1, while inflation expectations rose 2.5 percent.
  • Employment Cost Index was in-line with projections at a 0.6 percent gain, while the Goods Trade Balance was at -61.5 billion, in range of the economic consensus of -60.0 billion.
  • Core durable goods in December at -1.2 percent missed the estimate of -0.1 percent durable goods orders at -5.1 percent was sharply below the forecast -0.6 percent.
  • US weekly unemployment claims at 278,000 were better than the forecast 281,000 and below the psychological 300,000 mark.
The gold rally is now battling a physical demand concern as Indian trade has lost pace and Chinese investors prepare for the aforementioned Chinese Lunar celebration.

This will further constrain the gains for gold as physical demand is likely to weaken.

While sentiment is improving across commodities the major concern now is where golf will re-bound of it will be carried along if long-term investors get favorable towards commodities.

Gold reached a 12-week high of $1,127.80 on Wednesday, after the Federal Reserve said it was closely watching the global economy and financial markets. This supported the view that U.S. policymakers may not be able to raise interest rates again as soon as March.

Currently the major deciding factor is the US tightening policy. Market players believe that even one further lifting of the fed funds target this year will come with great difficulty, and that the Fed’s own projected pace of four hikes this year is a near impossibility.

Maybe things won't be this bad next month in the wider markets, so it is possible that if ETF flows are subsiding, prices will be lower too.


But one positive lesson we can learn from this month is that gold does still have a safe-haven role and that could stand it in good stead through a testing year to come.


- Previous blog - "Markets remain calm as we enter 2016:RSBL"

http://riddisiddhibullionsltd.blogspot.in/2016/01/markets-remain-calm-as-we-enter-2016.html

Sunday 3 January 2016

MARKETS REMAIN CALM AS WE ENTER 2016: RSBL

 By Mr. Prithviraj Kothari, MD, RSBL

Firstly wishing you all a very happy new year. 



 
To begin with, United States, Europe, Japan and many other countries remained shut on account of New Year's Day and  hence markets were calm and serene market with volatility to its minimum.

Whatever fluctuation came in was mainly due to two reasons:

In the international market it was the data released from the US and in the domestic market it was the weakening rupee against the dollar.

Gold prices were also supported as weaker than expected economic data from United State likely to spurt safe haven demand for the yellow metal . Data released from the US was as follows-


  • On Thursday, government data showed that the number ofmAmericans filing new claims for unemployment benefits rose sharply last week, a potential signal the job market was losing steam
  •  Initial claims for state unemployment benefits rose 20,000 to a Seasonally adjusted 287,000 for the week ended Dec 26.
  • US Chicago Purchasing Managers Index in December month fell to 42.9 compared to analysts' expectation of 49.8 and 48.7 a month ago, government data showed on Thursday.
  • SPDR Gold Trust holdings dropped by 0.18% i.e. 1.19 tons to 642.37 tons on Thursday compared to 643.56 tons in previous trading day.
  • After the SPDR Gold Trust reported outflows on Thursday, the harp gain in yellow metals was subdued as this outflow created a weak investment sentiment for gold on the market.

Gold prices fluctuated on Friday after the Indian rupee weakened against the dollar and on Exchange Trade Funds (ETFs) outflow, indicating subdued investment demand. Prices of the bullion were supported after the Indian rupee weakened against the dollar, denting prospects of higher imports. At 1:40PM dollar/rupee traded at Rs 66.21/$1 compared to previous close of Rs 66.15/$1.



Gold prices were also supported as weaker than expected economic data from United State likely to spurt safe haven demand for the yellow metals.

Prices of the precious metal were also supported by thin trading volumes as financial markets in United States, Europe, Japan and many other countries are shut on account of New Year's Day.


In short, Gold prices were supported by weak local currency while subdued investment demand capped the gain.



Now as we welcome 2016 with a bang we hope it has lots in store for the global economies and for the yellow metal precisely.




The primary purpose of this blog by Prithviraj Kothari - MD, RSBL, is to educate the masses of the current happenings in the Bullion world.

- Previous blog -
"Mr. Prithviraj Kothari, (MD, RSBL), makes gold price prediction for the year 2016
http://riddisiddhibullionsltd.blogspot.in/2016/01/mr-prithviraj-kothari-md-rsbl-makes.html 



Friday 1 January 2016

Mr. PRITHVIRAJ KOTHARI (MD, RSBL) MAKES GOLD PRICE PREDICTION FOR THE YEAR 2016



(Brief details are given below. For full detail, view the embedded You Tube video) 


Link to the video: https://youtu.be/0vUYZf9M1RQ




QUESTION 1: After 2 consecutive years of negative returns, what is your Gold Price Forecast for 2016?
Prithviraj Kothari: I do agree that since couple of years there is a downward trajectory with respect to Gold prices, since it had been increasing for almost 11 odd years. But according to me a range of $1050 - $1070 an oz is the cost to the mines to procure Gold. Looking at that figure, I find it difficult for the price to go below this range. I see an increase to the extent of 7% to 8% compared to last year in the year 2016.

QUESTION 2: How will it translate in the Rupee term?
Prithviraj Kothari: In rupee term, gold price may hover between Rs 24,000 and Rs 30,000 per 10 grams.

QUESTION 3: What impact do you envisage on gold following the US Fed’s interest rate hike?
Prithviraj Kothari: A 25 bps interest rate hike after a decade in 2015 followed by four such hikes in 2016 by the US Fed has already been factored in with the price of Gold. If you see the price of Gold eventually appreciated when the rate hike took place. A bottom line could be $1000 to $1050 at the most in the line with the mining costs.

QUESTION 4: What impact do you see of high import duty on gold import into India?
Prithviraj Kothari: Indian population is around 125 crore with consumption less than 1gram, bringing import figure to 850-900 tons. With present import duty of 10%, it has created big gap between International price and Indian price. This import duty almost comes to INR 250,000 per kilo. Usually, import of gold has been in the range of 800 to 900 tons per year. Last year gold smuggling was around 200 tons. The increased price gap may give rise to increase in gold malpractices.



QUESTION 5: Do you see any impact of Government related Gold schemes? Would they be beneficial?
Prithviraj Kothari: I am positive with government efforts & schemes. Gold Monetization and Gold Sovereign Bond schemes are good. Gold Monetization scheme will be worthwhile, if it can draw 1000 tons or even 500 tons of gold from temples, public etc. will also have impact on international price. It should happen gradually.

QUESTION 6: India’s gold import has been diverted towards Dore. Would it really help gold jewellery industry at large?
Prithviraj Kothari: It depends on import. Dore import is processed in limited refineries to manufacture pure gold. These refineries import Dore at $2 lower. Those jewelers will be benefited by $3 to 4, who make ornaments by buying gold from refineries.

QUESTION 7: What is your final take on ending of 2015 and 2016 soon to begin?
Prithviraj Kothari: 2016 will be good for the trade. It may create bullion history and it may be ‘Golden Period’ for all traders.



Facebook: https://www.facebook.com/prithviraj.kothari
Twitter: https://twitter.com/prithvirajrsbl
Blogger: http://riddisiddhibullionsltd.blogspot.in/
RiddiSiddhi Bullions Ltd.(RSBL) http://www.rsbl.co.in/
Youtube: http://www.youtube.com/user/PrithvirajKothari
Google+ URL : http://www.google.com/+PrithvirajKothari

Saturday 26 December 2015

AWAITING A GOLDEN YEAR:RSBL

By Mr. Prithviraj Kothari, MD, RSBL




Holiday fever, kept the markets calm with very little volatility in gold prices.

After the Federal Reserve’s interest-rate rise last week, trading remains cautious while investors assess conditions in a non-zero bound environment for the first time in seven years.

Gold prices ended the U.S. day session and a holiday-shortened trading week modestly higher Thursday. Some short covering in the futures market and perceived bargain-basement buying in the cash market heading into a long weekend gave gold its lift.

There were no major international news developments Thursday and the marketplace worldwide was very subdued ahead of the Christmas holiday on Friday.

Spot gold was last at $1,073.60/1,073.90 per ounce, a $2 increase on Wednesday’s close. The yellow metal has climbed away from five-year lows from the start of the month of just $1,046.40.

The gold price was higher on Thursday morning, tracking the recovery in the oil price and a slight decline in the dollar, in thin pre-Christmas trading conditions.

Now that we have rounded up for the week, I would also like to share my view on gold outlook for 2016.

As we all have seen that after increasing consecutively for 11 years, gold started giving negative returns since 2013.  Formerly gold was seen as the highest return generating asset in its class. But now economies have changed and people have shifted to other modes of investment like equities and hence gold has lost its appeal as a safe haven asset.


Will gold bottom further? Has it reached its support level? What’s in store for gold in 2016
 Well these questions have been constantly rotating the market since the past fortnight, especially after the fed rate hike.

Everyone in the markets had hopes that the Fed will raise interest rates for the first time in a decade. The day the Fed increased its rates we saw ETF gain 18.6 tonnes for the first time in the past three years. Everyone thought that a rate hike would slosh gold prices but gold managed to stabilize at 1075$ and did not decline as expected.

Moreover, if we see from the mining aspect, the mining cost of gold is around 1000 $- 1050 $ and I don’t see gold going below that level. Now that gold has already witnessed this bottom. I think this year gold might appreciate around 7-8 per cent compared to last year.

Moving on to the Indian markets. As far as the Indian markets are concerned, the INR is gradually appreciating which is in turn affecting gold prices. If you see the international market. Gold may bottom at 1000/1050 dollar and may witness an upswing towards 1200-1300 dollars. But at the same time the rupee appreciating will bring gold in the range of Rs. 24,000- Rs.30, 000 in 2016.

The population of India is 125 crore. Every year 800-900 tonnes gold is imported whether the price is $1900 or $700. A matter of concern is the custom duty that is currently 10 percent. Due to this, there is a huge difference between off shore and domestic markets. This duty increases gold prices by Rs.2, 50,000 per kilo. 

Due to high duty the quantity of gold smuggled into the country is also rising.  Last year around 200 tonnes of gold was smuggled. And this year the figure might touch and 300 tonnes thus bringing the official import figures down to 500-600 tonnes. 

The government has been trying its best to get some viable and profitable schemes into the market like the gold monetization scheme and gold sovereign bonds. Gold sovereign bonds are not a viable option as prices are fixed at Rs.26840 and currently the prices are almost 5per cent down.

Gold monetization is a scheme where the temples are more willing to deposit gold in banks. This scheme may take time for proper implementation but once it pick up we are really positive that the idle gold lying in the temples and Indian household) almost 500-1000 tonnes) will be flushed into the market and this would really help the economy.
  
To conclude I would say that 2015 was a year with nervous sentiments. But 2016 could be the golden year literally especially the jewelers and the investors.



The primary purpose of this blog by Prithviraj Kothari - MD, RSBL, is to educate the masses of the current happenings in the Bullion world.

- Previous blog -
"Markets Remain Calm For Gold: RSBL"
http://riddisiddhibullionsltd.blogspot.in/2015/12/markets-remain-calm-for-gold-rsbl.html