GOLD TEND TO MOVE SIDEWAYS

-By Mr. Prithviraj Kothari, MD, RSBL (RiddiSiddhi Bullions Ltd.)

As investors took profits in the precious metals market, gold witnessed a down fall on the last day of trading week. But if you look at the overall week, gold still posted its biggest weekly gain in 3 months. Bullion has recovered more than half of the loss of $225 per ounce incurred between April 12 and 16.

The main reason behind this price pick up was an extremely high physical demand for the yellow metal world over. In Asia particularly in Hong Kong, Singapore, Indonesia, Thailand and India gold was being sold at high premiums. Some analysts have described this as pent-up demand in which buyers pounced when presented with lower prices. This helped gold rise for the week.

The mid-April price decline also came at a key period for seasonal demand due to spring weddings in India, as well as the 15th May Akshaya Tritya festival, auspicious for gold buying. Bullion dealers in India put in great efforts to meet the strong demand, quoting premiums even as prices recovered partially since last week.

But while physical demand has been strong, China, the second-largest gold consumer after India, will be on holiday for three days next week for the May Day break, possibly removing significant support from the market

Apart from physical demand there has been sustained effect from the economic data coming in from the US. First-time claims for unemployment benefits fell by more than expected in the week ended April 20, the Labor Department said. The initial jobless claims fell to 339,000, a decrease of 16,000 from the previous week's revised figure of 355,000. Economists had expected jobless claims to show a more modest decrease, dipping to 350,000 from the 352,000 originally reported for the previous week. Investors in exchange-traded funds headed for the exits, worried about potential central bank sales of bullion and uncertainty over the outlook for U.S. monetary stimulus. 

Gold traders will have plenty on their plate next week. The basket includes-

• Central Bank Meetings
• U.S employment Report
• The U.S. Federal Open Market Committee Meet
• The European Central Bank meet
• personal income and spending Monday
• Chicago Purchasing Managers Index
• ADP private-sector employment report
• Supply Management manufacturing PMI
• initial jobless claims

Traders also will keep monitoring reports about the voracious physical buying that was unleashed by a sharp price decline in mid-April. Traders will find on May 3 out if the labor market has picked up, when the Labor Department releases the April report. 

And, as always, traders will be watching economic data to see whether conditions are improving or deteriorating so they can gauge for themselves what officials may do with monetary policy down the road.

India, the biggest buyer of gold, has been trying to limit imports to keep a lid on record current account deficit, and the economic advisory council expects the country to import $45 billion tons of the yellow metal in the year to March 2014.

In the coming week gold is expected to move in the range of 1405$- 1485$ in the international markets and in the Indian markets it will moving in the range Rs.26,000- Rs.28,500 per 10 gram.

“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 -

"RSBL  Launches 18th delivery center of RSBL SPOT in Hubli, Karnataka"

 http://riddisiddhibullionsltd.blogspot.in/2013/04/rsbl-launches-18th-delivery-center-of.html

RSBL LAUNCHES 18th DELIVERY CENTER OF RSBL SPOT IN HUBLI, KARNATAKA

Hubli, 24^th April, 2013:   After successful launch of RSBL eCoins in Andhra Pradesh, RiddiSiddhi

Bullions Ltd. (RSBL) is glad to launch its 18^th delivery center of online spot trading system RSBL SPOT (Flagship product) in Hubli, Karnataka.

This online system will enable clients to buy as well as sell precious metals like gold, silver and platinum. Since its first introduction in Mumbai, Maharashtra in the year 2008, RSBL SPOT boasts a 2500+ client base with 17 delivery centers across India. The city of Hubli will witness RSBL's 18th Authorized Delivery Center.

The company has launched two symbols:

1. 1Kilo Gold symbol. 995 purity, T+2. Symbol name: GOLDHUBT+2.

2. 100gms Gold symbol. 999 purity, T+2. Symbol name: GOLDHUB100

Hubli based symbols on RSBL SPOT will be preferably traded only with the intention of giving or taking delivery within a T + 2 cycle of trading, i.e. the delivery has to take place within 2 working days after the tradable day.

Speaking at the launch, Mr. Mukesh Kothari, Director, RiddiSiddhi Bullions Ltd. quoted,”Hubli being a hub by itself would enable all the jewellers/clients in the neighbouring regions of north Karnataka, to trade with convenience. As per our research, the need of the hour in Hubli is better price transparency in bullion market and benchmark rates. With our successful reach in 17 cities across India, I feel that RSBL SPOT is the system, the jewelers are looking for.”

As of today, RSBL SPOT online trading system is available in Ahmedabad, Bengaluru, Chennai, Coimbatore, Delhi, Ernakulum, Hyderabad, Indore, Jaipur, Hubli, Kochi, Kolkata, Pune, Rajkot, Surat, Thrissur, Trivandrum, Vijaywada with the head office located in Mumbai.

Clients with VAT certificate of Karnataka state would be eligible for registration with RSBL SPOT. Along with benchmark Prices and Price transparency, RSBL SPOT helps combat volatility risks due to live trading; covering Indian and International market hours (10.05 am to 9 pm IST). The system offers International live rates, research report, recommendations; news updates etc to make trading efficient. Though important features can be adapted quickly by beginners, there are many more features for advanced users, especially those who like trading technically. The application provides access to real time Indian bullion price quotes for everyone in the bullion ecosystem – jewellers, banks and 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 -
"Is it the end of the "golden" era? 
http://riddisiddhibullionsltd.blogspot.in/2013/04/is-it-end-of-golden-era.html

IS IT THE END OF THE "GOLDEN" ERA?

-By Mr. Prithviraj Kothari, MD, RSBL (RiddiSiddhi Bullions Ltd.)

Now when the whole world was writing about precious metals, the history crash, the further predictions etc I thought it was time to sit back and take a look at the whole scenario.

It was too early to comment as all that was happening was panic. Now that markets have stabilised, I would like to take this up for discussion.

To start off, clearly a lot of psychological damage has been done, as well as the practical damage of margin calls on leveraged positions and collateralised gold, so we should not expect a recovery as quick as the decline

The month of April 2013, will always be remembered in the history of gold as it was a record breaking drop in gold and silver prices in a single trading day. Gold saw its biggest two-day fall in 30 years, crashing to $1,322.06 an ounce as panic selling drove the precious metal’s price further downwards

I think that this correction was bound to happen and it happened here. A correction of 20-25 per cent was witnessed after 11 long years.

One of the main reasons was that Investors showed great concern on issues that European Government may have to follow Cyprus in selling part of their holding. This triggered panic selling thus hitting stop loss. Long positions were shifted to short. There was a negative sentiment that caught the market and it sparked sell off in gold.

Some say that the Fed and BOJ asset purchase led to the collapse of gold prices, some say it was ETF liquidation etc

I think finding 'a' particular reason will not explain the phenomena.

The bullion market shifted direction again as both gold and silver resumed their downward trend that started last week. Both precious metals slightly declined on Wednesday along with other commodities such as oil and leading “risk related currencies” such as Euro and Aussie dollar against the USD.

However, on Thursday gold market revived supports from the weak US economic data. Gold extended gains above $1,400 an ounce on signs that jewellers, investors and store of value buyers of gold are taking advantage of the biggest slump in prices in three decades.

Global demand for physical is very clearly seen in rising premiums being seen internationally. The drop in prices ignited a spate of buying in gold coins and bars, sending premiums for gold bars to multi-month highs throughout Asia. Demand intensified overnight as prices rose over $1,400/oz.

Spot gold started weakly, dropping to $1,385.50 in the Asian sessions, but it soon recovered, breaking above the resistance level of $1,400 to a peak of $1,425.25 per ounce – up for the fourth consecutive day and an increase of 5.5 percent on Monday’s close.

Market participants said there’s been a change in attitude in the gold market since the price break that began April 12. On the physical demand side, there’s been an enormous rush to buy, with news reports of strong demand and rising premiums over spot price for gold in many Asian countries. The U.S. Mint also reported very strong sales for gold coins.

Leading economic indicators and the Philadelphia Fed business survey both came in below forecasts. That bolstered ideas the Federal Reserve should not be backing off on its aggressive monetary easing policies any time soon.

The IMF too forecasted lower world economic growth, in the latest signal that major economies of the world continue to splutter or only see moderate growth.

Central banks are divided on whether gold is cheap enough to increase investment, after the two-day plunge through April 15 wiped $560 billion from the value of reserves. Sri Lanka’s central bank governor said falling prices are an opportunity for nations to raise gold reserves and that the island nation will consider buying more. The Bank of Korea said the plunge isn’t a “big concern” because holding the metal is part of a long-term strategy for diversifying currency reserves.

There is a Group of 20 meeting in Washington, D.C. that began on Thursday. The market place will pay close attention to any proclamations regarding foreign exchange rate, financial and/or economic policies coming out of the confab. 

For India, Decline in bullion prices has boosted domestic demand in the country, the world’s largest gold consuming nation.

As of now Gold is expected to move in the range of $1275- $1550 in the next six months in the international markets. Till the prices do not cross $1550, the market seems to be weak for gold.

“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 -
"Record breaking drop for gold and silver in a single day "
http://riddisiddhibullionsltd.blogspot.in/2013/04/record-breaking-drop-for-gold-and.html

RECORD BREAKING DROP FOR GOLD AND SILVER IN A SINGLE DAY

-By Mr. Prithviraj Kothari, MD, RSBL (RiddiSiddhi Bullions Ltd.)

Gold and Silver dropped drastically on Friday. Gold was down by 6 percent and silver 8 per cent. Gold was running at a 15 month low at $1484 and dropped by almost 80 dollars in a single trading day.

By Friday evening, gold dropped by Rs. 1050 per 10 gram and was trading at  Rs. 28180  while silver dropped by Rs. 2350 and was trading at 49,350 per kg in the Indian markets.

Even after markets closed, gold in the international markets dropped on Friday mid night. Gold slided around 20 dollars further late in the night.

This downfall effect was seen in the domestic markets on Saturday. Gold dropped by Rs.300 trading at Rs. 27900 and silver dropped by almost Rs. 900 trading at Rs. 48900.

The main reason cited behind was gold sell off by central bank. Some 158,200 taels of gold bullion ( roughly six tonnes) were sold in six auctions held by the State Bank of Vietnam.

There were news that as soon as the international markets opened, Merryl Lynch sold 4 million ounces of gold.

Heavy ETF selling was also seen in the markets.

What triggered panic selling amongst investors was a statement by Draghi. During a press conference he said that while Cyprus doesn’t have to sell its gold, any money that is raised from the sale must go towards covering the losses from the emergency loans to country’s banks.

This resulted in panic selling.

The important  US data released on Friday gave an indication that US wholesale prices aren't rising. Any such signal will prompt investors to sell Gold.

The next target for gold is 1450$ as gold is expected to decline further on the lines of a strengthening US economy.

“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 -
"RSBL launches E coin trading system for the first time in Andhra Pradesh"
http://riddisiddhibullionsltd.blogspot.in/2013/04/rsbl-launches-e-coins-trading-system.html

RSBL LAUNCHES E COINS TRADING SYSTEM FOR THE 1ST TIME IN ANDHRA PRADESH

Hyderabad, 12th April, 2013: Following their grand success of the flagship product ‘RSBL SPOT’, India’s first fully electronic, over the counter (OTC), delivery based bullion trading system with over 2300+ clients across 17 cities in India, RiddiSiddhi Bullions Ltd. (RSBL), India's largest bullion trading company, is glad to announce their ingression of smaller denominated Gold bars in South market via RSBL eCoins. The antiquity and demand of gold in south Indian region has always been impressive. A recent report by Karvy Private Wealth says the four southern states account for over 40% of the nation's overall gold demand.

Even when the demand is promising, Issues like long queues for getting deliveries during peak seasons, institutions and banks often misguiding customers by way of offering discounts on smaller denomination Gold bar’s price etc have been common concerns in Andhra Pradesh. To counteract these issues, RSBL eCoins will provide its retailers/customers with live transparent benchmark prices along with instant trade and rate confirmations. 

‘RSBL eCoins’, a state of the art fully electronic over the counter smaller denomination Gold bars trading system, where buying/selling starts as low as 1gm, is a B2B model where Spot delivery will be given. There are no account opening charges, trading commission and terminal usage charges. The bars are available on the basis of real time pricing, thereby benefiting them to source their supplies at benchmark prices. The bars will be available on the terminal in widest range of denominations: 1, 2, 5, 10, 20 and 50 grams in .999 purity. The highly specialized client relation team will be available to provide technical support, during market hours. The system has the most comprehensive charting package that will help them trade efficiently using technical indicators.

The packaging of the smaller denomination Gold bars is very attractive that comes with a tamper-proof seal that meets international packing standards. Registered Clients can trade on this terminal via electronic devices like PCs, laptops, tablets, mobiles etc.

The official inauguration in Andhra Pradesh was done by Mr. Prithviraj Kothari (Managing Director): Riddisiddhi Bullions Ltd. Commenting on the occasion Mr. Kothari said, “It gives us immense pleasure to announce our entrance in small Gold denomination bars market of South India. Andhra Pradesh is a prosperous place, where people buy a lot of gold and related products like small denomination bars, jewelers etc. Looking at the market we see a huge potential of our eCoins system to flourish as RSBL SPOT system has.”

About RiddiSiddhi Bullions Ltd. (RSBL): Established in the year 1994, it has been amongst the market leaders in providing wholesale and retail level bullion delivery in the spot markets across India. It has made investing in Gold, Silver and Platinum the ‘in’ thing with its easy, reliable and user-friendly systems and products like RSBL SPOT, RSBL eCoins, Bullion++, Bullion India, RSBL Coins, RSBL DIA Jewels and so on. The company’s promoters have a combined experience of over 100 man-years in the industry. RSBL has received SME 1 rating from CRISIL Ltd., which is the highest rating on the SME rating scale. RSBL is a nominated agency for import of Bullion in India and also one of the few Indian companies associated with the London Bullion Market Association (LBMA). It holds a reputation amongst LBMA’s good delivery member international supplier and banks. It has also been certified as a PREMIER TRADING HOUSE status under the EXIM policy of Ministry of Commerce, Govt. of India. , are few of many such accolades. RSBL has carved a niche in the market for being the first ever consolidated bullion trading company in India.


“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 -
"2013: Dubai precious metals conference"
http://riddisiddhibullionsltd.blogspot.in/2013/04/2013-dubai-precious-metals-conference.html

2013: DUBAI PRECIOUS METALS CONFERENCE

Dear all,

I am glad to be a part of: Dubai Precious Metals Conference, 2013. Noteworthy speakers across the world shared their expert opinions.

Everyone in the conference had an opinion that Gold bull run is not going to end soon.

I was in Panel 2: Gold Consumption giants; opportunities linking the UAE with China, India and the US:-

Few excerpts from my speech:
The Indian bullion industry is very robust. What is the percentage of trade between India and UAE? What is the export import scenario?

Mr. Prithviraj Kothari from Riddhisiddhi Bullions Ltd. said that from 1997 to 2012, India imported around 12000 tons at an average price of USD600 an ounce. The import from UAE into India is around 140 tons a year. If UAE banks and traders leave their consignment with Indian nominated agencies and banks, they can improve trade with India. If UAE and Dubai traders and banks can follow the same rule, they can increase the trade to 250 tons.

India consumes around 500 tons of jewellery and the largest exporter of the world. What is the export percentage leads to UAE? How it will be improvised?

Out of total exports from India, 41% of is directed to UAE. It is for local consumption in UAE and re-exported to countries in Middle East and Africa. So DMCC and Dubai is a major partner of Indian export.

To view more, do check: http://dpmc.ae/liveupdates.aspx


“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 -
"Is gold set to enter the first bear market since 2008"
http://riddisiddhibullionsltd.blogspot.in/2013/04/is-gold-set-to-enter-first-bear-market.html

IS GOLD SET TO ENTER THE FIRST BEAR MARKET SINCE 2008?

-By Mr. Prithviraj Kothari, MD, RSBL (RiddiSiddhi Bullions Ltd.)

There is a strong debate in the bullion market as to whether gold will enter its first bear market since 2008 as we see the world economy is improving or will it rally?

Some investors see gold plunging to $1400 and some see it shooting to $1800.

But most investors and traders are under the perception that gold is all set to enter the bear market as the US economy shows signs of global recovery.

The main driver behind gold’s weakness this year has been the focus on global growth and that’s meant rotation out of defensive assets like gold.

Bullion slipped this year after 12 straight annual gains as Federal Reserve policy makers debated the pace of stimulus. Gold hit a 10-month low below $1,540 an ounce on Thursday as the dollar strengthened ahead of a statement by European Central Bank chief Mario Draghi, after the bank left rates on hold as expected at its latest policy meeting.

Spot gold fell as low as $1,539.74 an ounce, its lowest since May 30, and stood at $1,546.90  

Gold is down 7.4 percent this year as global equities trade about 2 percent below a more than four-year high. Bullion is set for the biggest weekly drop in seven months and is nearing a bear market even as the Bank of Japan yesterday increased bond purchases and European Central Bank President Mario Draghi warned that he sees risks to Europe’s recovery.

Gold slipped in on mounting confidence that the global economy is strengthening and as investors awaited U.S. jobs data. Silver was near its lowest since July.

The entire market was expecting a good payroll farms data and a low unemployment rate compared to the last report. News of recovery of the US economy pushed gold further.

However, on Friday, when the data was released, it was a completely opposite picture.

The U.S. job-creation engine sputtered in March as employers hired fewer workers than expected and a shrinking labor force helped push the unemployment rate down to the lowest in four years.

Payrolls grew by 88,000, the smallest gain in nine months and less than the most-pessimistic forecast in a Bloomberg survey, after a revised 268,000 February increase, Labour Department data showed . The jobless rate fell to 7.6 percent from 7.7 percent.

The report followed a string of disappointing data this week on activity in the US manufacturing and services sectors and on private-sector hiring, raising concern the recent rally in equities has outrun economic fundamentals.

Considering that the great economic slowdown has still not shifted to the path of recovery, gold and silver once again came in to the spotlight. The negative data report released on Friday, pushed up gold prices further.

As far the Asian markets are considered, India awaits the beginning of the festive season next week and Chinese markets too will open up after a long holiday. Gold prices will further move upwards as we see strong demand for gold in the Asian markets. Weddings will start in India, the world's biggest buyer of gold, and continue till early June. Festivals like Gudi Padwa, Akshaya Tritiya, Baisakhi etc are lined up too. 

Consumers, investors and traders have started entering the market at this dip and I too fell that it is a wise decision to do so.


“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 -
" Is it time to adopt gold or abandon it??"
http://riddisiddhibullionsltd.blogspot.in/2013/03/is-it-time-to-adopt-gold-or-abandon-it.html