RSBL Gold Silver Bars/Coins

Tuesday, 26 May 2020

Where everything else is falling, Gold seems to pretty tempting

History has proved time and again that following major factors have always sent triggers and brought about a rally in gold prices

  • Financial market cyclicality 
  • Economic crisis.
  • Geopolitical stress.
  • Monetary instability.

Any one of these four factors possesses the power to drive gold prices here. But today, we don’t have to choose — all four are combining to trigger the gold-buying impulse.
One virus was enough to trigger all of the above factors.

Furthermore the extraordinary 12-month gold-price bull run shows no sign of ending. Despite predictions of a bubble set to burst, the yellow metal has risen by 36% during the past 12 months says Bullion king of India. Gold prices ended higher on Friday as testiness between the U.S. and China fed risk-off sentiment, drawing investors into assets considered to be havens, including government debt and the Japanese yen.
Further to the above factors, even drivers of money flow into safe haven assets and also support gold. Lately, the gold has been moving majorly due to the following reasons-

US-China tension escalation- The Wall Street Journal on Thursday reported that U.S. senators were introducing a bipartisan bill that would sanction Chinese officials and entities that enforce the new Hong Kong laws, and penalize banks that do business with the entities.
With the crisis in Hong Kong picking up, stock markets in Asia and the U.S. declined, resulting in “safe haven buying for both gold and silver.

The U.S. has threatened a very harsh retaliation if China challenges Hong Kong’s autonomy, which then could lead to U.S. implementing more tariffs. Those tensions aren’t likely to influence gold for long as the market tends to overreact once news hits, but still gold prices are bound to go up regardless of that giving hope to the top gold dealer in India.

Concern of second wave crisis drove money flow into safe haven assets- the immediate reason gold is finding support came from testimony to the Senate Banking Committee earlier this week by US Treasury Secretary Steve Mnuchin and Jerome Powell, chair of the country’s central bank, the Federal Reserve. According to the Seattle Times, Mr Mnuchin emphasised re-opening American workplaces to get the economy moving again, while Mr Powell suggested more stimulus measures may be needed which is why central banks have been pumping money into the markets.

Supply demand- This time around, the coronavirus is causing interruption on an unprecedented scale, including the supply of physical gold says RiddiSiddhi Bullions Limited. Three of Europe’s biggest gold refineries are based in the Swiss canton of Ticino. On March 24, cantonal authorities ordered all three refineries to close.

This perfect storm of a strangled supply and soaring demand has led some analysts to speculate that gold prices could reach an all-time high in 2020 – over $1920, which the current high is reached in August 2011.

Except, there’s plenty of evidence that this time is different, and gold could even outperform its previous rallies during market uncertainty. Consider that during previous major stock market crashes, such as the 2008 financial crisis or Black Monday in 1987, there were no other externalities affecting the price of gold, which was purely driven by supply and demand

However, analysts said continuing plans to reopen economies that have been frozen by the COVID-19 pandemic and hope for remedies for the virus have limited the upside in precious metals, sending gold lower for the week.

There was a slight slip on Monday morning as gold prices price lost 1.23% in early trading to stand at $1,735.25 an ounce. But the pattern of recent months has been decisively upwards, making it difficult to predict further for the bullion dealers in India.

The economic unease caused by the COVID-19 situation has prompted many investors to consider moving their assets into gold. But with the masses all thinking the same thing, what’s the market outlook for the yellow metal?
Interest in the metal has been growing recently in light of the pandemic as one of the safest and most resilient assets for investors. Russia, however, started to build up its reserves long before the crisis emerged.

Russia has become a saviour of the global gold markets as the pandemic has spurred abnormally high demand for the precious metal while it has at the same time also crippled companies' ability to produce gold in the amounts requested by market players

During that fateful mid-March week, gold prices also took a beating as investors fled to liquidate all assets. The price of one troy ounce of gold fell from a high of above $1670 on March 9 to below $1470 nine days later.
If you’d bought gold back in 2018 when it was trading around $1200, that represents returns of 50%. Even at the current prices, the all-time high would provide a return of over 12%. In a market where everything else is falling, those numbers appear to be pretty tempting says Prithviraj Kothari RSBL.

Friday, 22 May 2020

Gold Prices stomping back

Last Friday, gold prices hit their highest level since September 2012, at $1,762 and reaching record highs in many other currencies.
Gold prices were seen storming back towards their mid-Aril highs, with investor appetite up amid sustained market volatility.

Gold’s rise is amazing in that Japan and Europe are deep in a recession with their stock markets tanking, and the U.S. is just entering a recession, with most other major asset classes falling – except gold.

Gold prices settled higher Wednesday for a second session, as economic stimulus measures boosted demand for the precious metal against the backdrop of economies attempting to reopen from the COVID-19 pandemic giving bullion dealers in India some hope.

Precious metals gained after Fed Chair Powell’s bearish comments. Federal Reserve Chairman Jerome Powell told lawmakers the Fed was looking at extending access to the credit facilities to additional borrowers, including states with smaller populations.
The Senate committee was warned by the head of the central bank that the current downturn is considerably worse than any recession since World War II and that long-term unemployment could damage the economy.

This means that the path to economic recovery will extremely difficult and slow says RSBL. Which is why, he reiterated his commitment to use a full range of tools to support the economy, including leaving interest rates near zero until the economy is back on track. This saw safe haven buying remain strong, with gold prices pushing back towards USD1,750/oz. This will surely brig about a rally in gold prices, which was already being witnessed during this week which looks promising for top gold dealer in India.

Furthermore, demand for insurance against heightened uncertainty could help sustain the recent upward move in gold prices, and duly has revised its forward price projections. Here’s also a now-famous prediction of Bank of America for $3,000 gold by the end of 2021, with their equally famous four-word response to the printing-press paper profusion: “Fed Can’t Print Gold.”

A renewed outbreak of COVID-19 in Northwest China rattled investors. Authorities have subsequently reinstated lockdown measures for 108m people in provinces, including Jilin and Liaoning

Elevated uncertainties linked to the flood of liquidity into the financial system and the increase in global debt, coupled with elevated geopolitical uncertainties, may further increase safe-haven demand for gold says RiddiSiddhi Bullions Limited.