RSBL Gold Silver Bars/Coins

Monday, 16 July 2012


Gold and silver did not show much volatility from 2nd to 7th July. Post the Wednesday close (4th July), gold and silver tumbled down, Reasons cited for this were the ECB rate reduction from 1% to 0.75% which in turn affected the Euro, oil and precious metals.
Moreover, the U.S payroll report stated that only 80K jobs were added which means that though there was a development, it was at a slower pace.
This week’s movement relied on the minutes of the FOMC Meeting, China's GDP for the second quarter, Euro Council Meeting and the U.S trade balance.
Gold and silver moved in different directions for the second straight day but both metals did not do much during the week. On a monthly scale both precious metals slightly declined

It was a mild “risk-off” trading day in the market place on Thursday. Wednesday afternoon’s FOMC minutes from the Federal Reserve that confirmed a sluggish U.S. economy was responsible for this, but provided no fresh clues on any upcoming Fed monetary-policy-easing moves. Most market bulls wanted the Fed to signal it’s embarking on another round of quantitative easing, better known as QE3.

Fears of weakening world economies exhibited modest risk aversion in the markets which in turn led to a moderate downfall in gold futures on Thursday.
Like other commodity markets, gold declined and proved to be a risk asset rather than a safe haven asset.
Spot Gold was last quoted at $ 1,567.50 on Thursday.

However, Friday had somethething else in basket for gold .Risk taking in the marketplace following the release of the Chinese GDP figure on Friday, resulted in the price of gold gaining close to $20 an ounce for the day. Investor confidence in the global economic recovery was boosted following the Chinese news, which came in close to its expected level. The precious metal ended up finishing the week at $1589.26.

This week, analysts are warning that gold may not be able to extend Friday's gains. While the Chinese GDP figure was viewed as positive by many investors, it still did not signal any expansion in the global economy. Given the current state of the euro-zone, as well as fears that the region's debt crisis could spread further, gold may reverse some of its gains in the coming day
In India, onset of the monsoon plays an important role in the economic growth. The gold market too, will be paying attention to the outcome of India’s monsoon season.
Good monsoon season is positively correlated with agricultural crop yields, in turn farmers’ incomes and higher gold demand. Rural farming areas account for approximately 60% of Indian gold buying. However, So far, the monsoon season is not off to a good start, with rainfall to July 10 reported by be 23% below average, although sowing levels, which are also important factors for agricultural yields, are pretty much in line with last year. The India Meteorological Department has said that the monsoon is likely to pick up in July and August, forecasting 98% and 96% of respective monthly averages. So for gold, while the initial indicators aren't so good, there's still time for some optimism to grow.

No comments:

Post a Comment