RSBL Gold Silver Bars/Coins

Thursday, 13 September 2012

BULLIONS: 1st to 10th Sep, 2012

The prices of gold and silver resumed their rally, much like the U.S stock market. Further, the rise of major foreign exchange rates including the Euro, Aussie dollar and Canadian dollar against the USD may have also contributed to the recovery of bullion rates.

The U.S ADP Non-Farm Employment Change was expected to have a clear and substantial effect on commodities, equities and forex markets. If the report shows growth rate of above 120thousand jobs then the chances of the FED introducing a stimulus plan in 2012 will be lower. This report plays an important role not only for the US dollar but also for the bullion prices. A stable labor market would reduce pressure on the Fed to take aggressive monetary easing as its Sept. 12-13 policy meeting, such as a 3rd round of bind buying known as quantitative easing, to underpin growth.

On 7th September, the price of gold rose by 0.68% to $1,705; Silver also increased by 1.07% to $32.67. During the week, gold increased by 1.07%; silver by 3.92%. Comex gold futures prices ended the U.S. day session with moderate gains Thursday, and hit a fresh six-month high early on.

The monthly meeting of the European Central Bank did produce the widely expected, fresh EU monetary stimulus plan, in which the ECB will buy EU countries’ bonds. The bank left rates unchanged at 0.75%, but ECB President Mario Draghi announced an “outright monetary transaction” plan, which would allow the ECB decide when to start, continue or suspend bond purchases.

In a press briefing after the ECB meeting, Draghi said this plan allows the central bank “to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro.

The bond purchases would be “sterilized,” meaning that the amount of money put into the market via bond buys would be taken out taken out of the system in equivalent measures by other means. Also at the meeting, the ECB lowered its forecast for European growth. Since Draghi spoke, gold prices came off of their six-month high, but have held above $1,700.

Market sentiment improved after the data showed U.S employment rose more than expected and growth in the services sector gathered pace. The combination of the U.S. jobs figures and the ECB’s downward growth revision helped the U.S. dollar recover from earlier weakness.

Increase in gold prices internationally also created an impact on the domestic market
Last week, In India, gold peaked to its lifetime high crossing the 32,000 mark, just ahead of the huge festive season.

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