RSBL Gold Silver Bars/Coins

Saturday, 29 June 2013


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

                  As we said, the "bull" in the Bullion seems to be fading away.

Gold seems to be losing its glitter as it's no longer appealing to the common investor.
Gold has dropped almost $200 an ounce in the past 10 days.

Gold reached $1179- it’s lowest since 2010. In fact gold is headed for a 24 per cent drop for the second quarter. This is considered to be the biggest quarterly drop for gold since 1968.

All this was triggered due to short selling and good economic data coming in from the US. However, Gold has declined sharply since Fed Chairman Ben Bernanke said last week the U.S. central bank plans to start scaling back its $85 billion monthly bond purchases in the next few months if the U.S. economy grows more quickly than anticipated and the jobless rate falls rapidly. That would tend to drive up interest rates, making gold less attractive as a safe haven for funds in a low-rate environment. 

One of the prime reasons suspected was the panic selling, as everyone tried to exit as they were in deep fear as to how low can gold go.

However, Friday was welcomed on a different trading note for gold. Though it dropped during the day, later in the evening it bounced back. The main reason for this was that Friday witnessed a daily close, a weekly close, a monthly close and a quarterly close for gold contracts. This resulted in short covering. Also 1180-1155 was seen as a good bottom for gold to bounce back. It turned back from 1179 and crossed 1200 thus reaching 1228 by 11 pm (IST).

A record breaking event that we saw in the past week was the depreciation of the rupee in the Indian market. Rupee was valued at its life time low of 61.15 against the dollar. If this depreciation would not have occurred then gold would have been somewhere around 22,000 keeping in mind the drop in gold prices in the international markets. But a weak rupee curtailed the prices thus creating a support for gold at 24,800. 

Platinum remained under pressure, although it finds good support around the $1,320. I feel platinum might appear a more promising prospect, given their relatively better looking fundamentals, mostly on the supply-side due to concerns over strike activity in South Africa. However, these fears may have been somewhat reduced by the civil and reasonable wage settlement at Aquarius earlier this week—the first platinum miner to settle in South Africa’s 2013 wage negotiation season. However, whether this negotiation and settlement sets a precedent for the rest of the sector remains to be seen, especially since these negotiations were not marred by NUM-AMCU rivalry, as might be the case at other miners.

Gold support is at $1,205 and $1,170. Resistance is at $1,265 and $1,300. Silver support is at $18.18 and $17.70, resistance is at $19.42 and $20.16.
In the domestic market, gold is expected to move in the range of INR 25,500 on the lower side and 27,500 on the upper side

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