Gold Rates - RSBL

Gold and dollar have long been inversely proportional to each other. Gold is the quintessential “anti-dollar” — a place to turn for those who distrust fiat currency — so it seemed natural that prices would rise in a world of low real interest rates and cheap dollars.

The unraveling of the relationship between gold and real interest rates could be a paradigm shift for the precious metal, leaving investors struggling to calculate its “fair value” in a world where the old equations don’t seem to apply. It’s also raising questions about if and when the old dynamic might reassert itself – or whether it already has, just from a new base.

Bullion hasn’t moved much, even as inflation-adjusted gold rates soared this year to the highest since the financial crisis. Real yields — measured by the 10-year Treasury inflation-protected securities, or TIPS, — jumped again on Thursday to the highest since 2009, while spot gold nudged down a mere 0.5% the same day. The last time real rates were this high, gold rates were about half the price.

U.S. 10-year bond yields at fresh 16-year highs as the U.S. dollar near a one-year high continues to keep a lid on the gold market; however, according to one market strategist, the precious metal's downside remains limited as economic uncertainty and rising U.S. debt provide solid support.

After last week’s monetary policy decision where the Federal Reserve left interest rates unchanged, it is clear the central bank is done raising interest rates.

Slightly hawkish Fed and global central banks are currently suppressing gold, although some signs of economic stress are also keeping the market supported overall.

Moreover, ECB hasn’t given any clarity on inflation trajectory going forward and now most FED members are expecting slow landing.

Gold has a bright future in the coming year, where market participants expect it to rise to a new all time high even if there is a mild recession in the global economy.

Along with growing economic uncertainty, growing deficit problems in the U.S. are also creating some support for gold as it will limit the Federal Reserve's monetary policy decisions after it raised interest rates at an unprecedented pace.

Gold has a solid long-term bullish support and   an impending government shutdown could create some near-term safe-haven demand for the precious metal

Looking to the New Year, the analysts said that they see gold prices pushing to $2,200 an ounce by the end of 2024 as investors realize how difficult it will be for central banks to bring core inflation down to their 2% targets.

There’s always the potential catalyst for a recession that could push investors to safe haven assets like gold. Supporting gold prices is also central bank buying, so the bottom hasn’t essentially fallen out for gold.

It's Data Packed Week - RSBL

Gold prices edged higher on Monday, helped by a retreat in the dollar and bond yields, while investors awaited a slew of U.S. economic data this week for more clues on interest rate outlook.

Gold has started the new week on a strong note as the FX market largely remains range-bound in part due to a UK holiday. It's up $7 to $1921 after touching $1925, which was the highest in more than two weeks.

The dollar eased against rivals, making gold less expensive for other currency holders. The benchmark 10-year Treasury yields held below their recent peak. 

Looking ahead, the precious metal will be very sensitive to incoming US economic reports, given the pledge by the Federal Reserve Bank (Fed) to proceed with caution after having already delivered 525 basis points of cumulative tightening since March 2022 in its most aggressive hiking cycle in four decades

This is the unofficial last week of summer for the U.S. Look for the marketplace to become more active next Tuesday, following the three-day U.S. Labor Day weekend holiday. This is a big week for U.S. economic reports, so traders and investors are likely to become at least a bit more tuned in as the week progresses. The U.S. economic data pace picks up rapidly on Tuesday and it’s a big data week.

Some Important data releases are due this week- 

● U.S. personal consumption expenditures price index report due on Thursday

● The August US nonfarm payrolls (NFP) report due out on Friday is likely to provide valuable information on the outlook and guide the Federal Open Market Committee's (FOMC’s) decision-making process, so traders should follow the release closely.

● The strength or weakness of the NFP survey will be pivotal for the US dollar and gold prices, significantly shaping their near-term trajectory by influencing the Fed’s tightening roadmap.

To sum up, the Gold Price has the majority of catalysts needed for the further upside but $1,940 and broad US Dollar weakness, as well as the downbeat yields, will decide the further advances of the precious metals and the dollar

The U.S. economy is set to enter a period of very low growth combined with persistent inflation, and this means precious metals like gold and silver are likely to see significant prices increases.

While we will not rule out the potential for additional upside action in gold and silver prices today, bullish classic fundamental supply and demand information is not overtly clear for the bull camp. Nonetheless, the outlook for China has improved minimally and the charts in gold and silver prices have improved thereby allowing for some follow-through gains. We suggest longs use stops on gold at $1937, with stops in September silver at $24.07.

All Eyes On Important US Data - RSBL

Last week gold witnessed a series of whipsaws as traders are being dependent on US data releases. Gold swung into action in the range of 1900-1950 $.

Gold was little changed on Monday as investors awaited U.S. inflation data that could influence the Federal Reserve’s policy stance, 

The Labor Department’s employment report on Friday showed the U.S. economy added the fewest jobs in 2-1/2 years in June, but persistently strong wage growth pointed to still-tight labour market conditions.

Bullion prices have dropped more than 7% since reaching near-record levels in early May as investors scaled back expectations of an end to the Fed’s rate-hiking cycle.

Gold prices edged higher on Tuesday as the dollar and bond yields fell ahead of U.S. inflation data that could offer more cues on the Federal Reserve’s rate-hike path.

Longer-dated U.S. Treasury yields fell on Tuesday as investors awaited Wednesday's inflation data for further clues on whether price pressures are abating and if the Fed is closer to the end of its rate-hiking cycle.

Sticky inflation is widely expected to attract more rate hikes from the Fed, with the central bank set to raise rates by at least 25 basis points in an end-July meeting.

Higher interest rates dull the appeal of gold, which pays no interest

Recent comments from Fed officials reiterated that while the central bank was close to reaching its peak interest rates, interest rates will still rise in the near-term. U.S. rates are also expected to remain higher for longer.

While the prospect of an eventual end to the Fed’s rate hike cycle buoyed gold, higher-for-longer rates are expected to keep any further gains in the yellow metal limited, given that they increase the opportunity cost of holding bullion.

We favour the downside in gold and silver, but suggest traders avoid selling palladium. However, the control of the precious metal markets sits with outside markets, with the dominating force determined by which market (dollar or US interest rates) exhibits the biggest price moves.

The focus this week will be on U.S. CPI (Consumer Price Index) data due on Wednesday after last week’s Fed minutes showed a vast majority of the policymakers expected further policy tightening.There is a massive eye on tomorrow's inflation data - it comes too late in the day for the July meeting. That hike is basically sealed and it would take something pretty weak on the inflation side to change that.

Some Turbulence Expected Soon - RSBL

 The week opened on a slightly negative band for gold, as prices fell on Monday, sticking to a tight trading range seen over the past three weeks as markets turned cautious ahead of upcoming U.S. consumer inflation data and a Federal Reserve meeting.

Last week gold was supported by soft labour data. This pushed gold prices a bit over expectations that the Fed will skip a gold rate hike at the conclusion of a two-day meeting on Wednesday.

There is a lot of geopolitical and economic uncertainty occurring globally. 

The ongoing Ukraine crisis, Fed's economic uncertainty and financial crisis has led to a lot of volatility in the market. It has pushed gold into a tight trading range. 

Gold prices have stuck to a trading range of between $1,930 and $2,000 an ounce over the past three weeks, with uncertainty over the economy and monetary policy offering little cues for a breakout.

Gold stands to benefit from any potential pause by the Fed, and is expected to see increased safe haven demand as global economic conditions worsen this year. But given that U.S. interest rates are likely to remain higher for longer, upside in the yellow metal may be limited as returns on debt appear more attractive.

Rising interest rates had battered gold prices through 2022, as the Fed enacted its most aggressive pace of monetary tightening since the 2008 financial crisis. But the prospect of a pause in 2023 has kept gold upbeat so far this year.

While we will not argue against an upside follow-through in gold and silver prices,we still think the markets lack solid and sustainable bullish fundamental themes.

While we see the PGM markets continuing to slide, we see gold weakening but remaining capable of respecting consolidation support at $1,950. Silver on the other hand has a very strong chart set up and could be separating from financial market related fundamentals and in turn may be shifting toward factoring tight supply and hope for tech related demand improvement. However, both gold and silver should expect turbulence in the coming 3 sessions with global inflation readings and a US Fed rate decision scheduled for Wednesday afternoon. Uptrend channel support in July silver is far below the trade today down at $23.91 with closer in pivot point support seen at $24.32. As indicated already we see August gold remaining within a $1950 and $2000 trading range, but chart support is likely to be enhanced by weakness in the dollar.

Sentiment in the gold market remains bullish as momentum supports higher prices but analysts are warning investors that they should not expect prices to break above $2,000 an ounce next week as the Federal Reserve looks to maintain its hawkish monetary policy stance even as it leaves rates unchanged.

However, signs of a softening US jobs market should provide for ongoing declines in the dollar and ongoing declines in US treasury yields which are probably capable of pushing gold back up into consolidation resistance at $2001. 

Dampened Demand For Gold Over Rate Hike

 Last week gold ended  with a nearly 0.35% gain at $1,989.65, failing to close above $2,000 throughout the week. Concerns about rising inflation continued after 1Q A core PCE QoQ and 1QA GDP price Index came in higher than expected.

These damp sentiments continued as the week opened. Gold prices moved little in early Asian trade on Tuesday, hovering well below key levels as anticipation of a likely interest rate hike by the Federal Reserve supported the dollar and dented demand for the yellow metal.

Federal Reserve’s policy meeting due in 2-3 May this week remains each investors focus. The Fed is widely expected to deliver another 25 basis point rate hike on Wednesday amid strong US economic data and persistent inflationary pressures. Data showed that US consumer sentiment improved in April, while core PCE inflation exceeded forecasts in March.

But there is uncertainty about rate hikes and markets are not sure whether the central bank will signal a pause in its gold rate hike cycle.

This has kept demand for gold limited, given that rising interest rates push up the opportunity cost of holding non-yielding assets.

Bullion is known as a hedge against inflation and economic uncertainties, but rising gold rates tend to diminish demand for the zero-yielding asset.

Markets were also watching for a potential U.S. debt default, especially as a deadline for the government to raise the debt limit approaches. Treasury Secretary Janet Yellen warned of a potential default by as early as June 1.

Gold has struggled to hold the $2,000 an ounce level for nearly three weeks, as the yellow metal consolidated gains after surging to near-record highs earlier in April.

The short term and near term future of gold , is both uncertain and indecisive 

The next 18 months will be especially risky as the U.S. embarks on the 2024 election season

The political timetable of the election cycle between now and the 2024 elections in the United States and Taiwan will likely lead to more push-the-limit anti-Chinese aggressive foreign policy from the US. 

Fears of the Fed, coupled with a stronger dollar and yields will continue to see limited safe haven demand for gold, even as concerns over a U.S. banking crisis were renewed by the emergency takeover of First Republic Bank.

The future path of the yellow metal is likely to be determined by the Fed’s stance on interest rates,  any new developments in the banking crisis, important decisions before the election campaigns and most importantly the US China ties. 

Gold Expected to Remain Elevated

The average price of gold in Mumbai during FY 2022 was around Rs. 48000 let 10 gram which soared to around Rs. 55000 by the end of the year.

Currently gold prices are hovering around Rs. 63000 per 10 gm. Gold was seen touching new life highs due to the kn going geo political uncertainties.

In the first week of May gold jumped significantly. But the speed at which it rose , it was pulled down in double speed by Mid May.

Reasons for its volatility are many. let's begin with the gold price rise first

In 2022 Central Banks added 1136 tonnes of gold worth around $ 70 billion to their reserves. This addition has so far been the lagrest annual addition since 1967. The World Gold Council data revealed that Central Bank purchases , aided by rigourous retail investor buying and selling Exchange Traded Funds (ETF) outflows  , lifted annual gold demand to a 11 year hjgh.

Frther, the growing inflation triggering Central Banks to raise interest rates, tensions between Russia and Ukraine invoking fears of a full blown global war ,. uncertainty across stocks markets world wide and the recent collapse of the Silicon  Valle Bank, followed by stress sale of Credit Suisse to its rival UBS group, have contributed to rising gold prices.

Investors have reportedly been turning to gold and treasuries after the collapse of the Silicon Valley  Bank and Credit Suisse's implosion.

Now moving to this week's significant drop in the gold prices

Gold is down $230 to $1990 and that's the lowest level since May 1.

The $2070 zone of major resistance continues to hold and the $2000 level had held in two previous selloffs this month before breaking today. The gold market is soft today as the odds of a further fed hike next month creep up to 22% from 12% on strong retail sales, industrial production and home-builder sentiment.

Gold fell after robust US retail sales helped push the USD higher, weakening investor demand. This is despite an ongoing impasse on US debt ceiling negotiations. More hawkish comments from Fed officials also added to the headwinds for the precious metal.

We also expect a modest recovery of the dollar in the coming months. The pricing out of some Fed rate cuts and a modest dollar recovery will most likely result in lower gold prices but not in a change in trend. For 2024 we are optimistic about the outlook of gold prices. Monetary policy easing by the Fed, ECB and BoE will be a positive for gold prices in 2024 as the rate differences between USD/EUR/GBP versus gold (zero interest rate asset) narrow.

Basing the outlook on global financial instability , investor's and market players believe that gold will remain elevated in the coming years compared to pre COVID levels.

Dampened Demand For Gold Over Rate Hike

Last week gold ended  with a nearly 0.35% gain at $1,989.65, failing to close above $2,000 throughout the week. Concerns about rising inflation continued after 1Q A core PCE QoQ and 1QA GDP price Index came in higher than expected.

These damp sentiments continued as the week opened. Gold prices moved little in early Asian trade on Tuesday, hovering well below key levels as anticipation of a likely interest rate hike by the Federal Reserve supported the dollar and dented demand for the yellow metal.

Federal Reserve’s policy meeting due in 2-3 May this week remains each investors focus. The Fed is widely expected to deliver another 25 basis point rate hike on Wednesday amid strong US economic data and persistent inflationary pressures. Data showed that US consumer sentiment improved in April, while core PCE inflation exceeded forecasts in March.

But there is uncertainty about rate hikes and markets are not sure whether the central bank will signal a pause in its gold rate hike cycle.

This has kept demand for gold limited, given that rising interest rates push up the opportunity cost of holding non-yielding assets.

Bullion is known as a hedge against inflation and economic uncertainties, but rising gold rates tend to diminish demand for the zero-yielding asset.

Markets were also watching for a potential U.S. debt default, especially as a deadline for the government to raise the debt limit approaches. Treasury Secretary Janet Yellen warned of a potential default by as early as June 1.

Gold has struggled to hold the $2,000 an ounce level for nearly three weeks, as the yellow metal consolidated gains after surging to near-record highs earlier in April.

The short term and near term future of gold , is both uncertain and indecisive 

The next 18 months will be especially risky as the U.S. embarks on the 2024 election season

The political timetable of the election cycle between now and the 2024 elections in the United States and Taiwan will likely lead to more push-the-limit anti-Chinese aggressive foreign policy from the US. 

Fears of the Fed, coupled with a stronger dollar and yields will continue to see limited safe haven demand for gold, even as concerns over a U.S. banking crisis were renewed by the emergency takeover of First Republic Bank.

The future path of the yellow metal is likely to be determined by the Fed’s stance on interest rates,  any new developments in the banking crisis, important decisions before the election campaigns and most importantly the US China ties.  

It's A Big Week For Gold

Gold was going gaga over the ongoing uncertainties globally. There were a host of reasons combined that led to this spike 

Gold, the safest haven amid the ongoing uncertainty, also emerged as one of the most lucrative investment options in financial year 2022-23 with an impressive return of 16.1 per cent in rupee terms, and 2.3 per cent returns in dollars.

Since quite some time we have seen gold rates playing to the moves of either inflation number from US or the Ukraine Russia war. However, there have been a lot of influential factors that have been responsible for the rally in gold prices lately and will continue to do so. 

Effect on Gold rates due to the

Banking crisis- The banking crisis, triggered largely by continuous hikes in the US rates, has led to bleeding bond portfolios and only large banks can survive these losses, the rest could belly up. It has definitely played a key role in gold prices rally and shall continue to do so as many analysts believe that this is just the beginning of a banking crisis.

This scenario will keep safe haven appeal for gold rates

Inflation and gold rate hike - A lot hinges on whether inflation in the US stays above four per cent and the Federal Reserve effectively gives up its target of bringing inflation down to two per cent.

This could happen if there is intense political pressure on the Fed or if the US economy enters recession or suffers a banking crisis.

If the Fed starts cutting the gold rates while inflation is still high, gold may see an accelerated move higher.

Geopolitical - Apart from the ongoing Russia- Ukraine war there are other countries following suit which will definitely benefit gold. If China attacks Taiwan and if the US decides to defend Taiwan, gold prices could shoot up.

On the other hand, if Washington does not defend Taiwan, expect a quick move up and a quick retracement in the price of gold.

Physical demand - The key thing right now is that Russia and China appear to be accumulating reserves in a diversification away from US dollars. That China’s appetite for gold remains insatiable as the latest data from the People’s Bank of China bought 18 tones of gold last month.

China’s gold shopping spree hit its fifth consecutive month

According to many analysts, China’s dominating presents in the precious metal market is completely changing the investment landscape, creating solid value for investors.

Analysts note that China is expected to continue to increase its official gold reserves as it builds international credibility for the yuan. China continues to make important strides as it competes with the U.S. dollar as a world reserve currency. Any kind of physical demand will set gold prices rolling up.

However on the domestic front the recovery gold prices will not rise comparatively for Indian investors as the movement of the dollar-rupee rate is expected to be a key determinant and is likely to limit the gains.

Meanwhile, the volatility will continue if the new US jobs report this week confirms there will be worries ahead for the economy.

It's a big week ahead for Gold!

Financial Stress Attracts Safe Haven Buying In Gold

 Gold has gained almost $100 in the last two trading days. As we all know, the SVB collapse has been the sole reason behind these dramatic movements. And when this was not enough another bank shut down within a space of 72 hours- The Signature Bank. 

Global banking shares plunged as a move by the US to guarantee deposits at tech-focused lender SVB failed to reassure that other banks remain financially sound. 

The gold market saw great attention coming in from safe-haven trade in a chaotic market environment amid growing fears of contagion from Silicon Valley Bank's (SVB) collapse.

Several gold dealers in Mumbai shared their opinion. “There are two major drivers pushing the gold prices - the financial sector distress and the actions that will be taken by the Fed to overcome this turmoil. Markets are also reassessing interest rate hike expectations ahead of the Federal Reserve meeting on March 22.”

Friday’s market reaction saw a surge in gold buying as the bank's stocks came crashing down. This entire incident put the nonfarm payrolls number on the side and became the main influencer world over. The US authorities decided to step in over the weekend and cover all depositors at the Signature Bank. 

Owing to this, there are expectations that the Fed would hold back from increasing interest rates by an outsized 50 basis points next t week. This strain on the banking system and Fed’s efforts to reduce its repercussions has created speculation in the market as to whether the Fed will push ahead with such an aggressive tightening cycle. 

Gold jumped tremendously in a day's trading since November as markets went into panic mode and investors tried to seek haven in bullion.  This sudden spike is expected to mellow down, once markets get stable, and the Fed succeeds in regularising the situation. 

The upcoming US February Consumer Price Index and US Retail Sales reports are expected to be critical for monetary expectations in the gold price today and all these numbers will be monitored closely. However following the unexpected SVB collapse, markets are pricing in a more relaxed stance by the Fed.

The fact of the matter is gold prices this week could swing by $200 in both directions as the trade is already within a very hyper volatile posture leading into a wave of global price report measures this week that are expected to impact the US Fed rate decision on March 22nd. In fact, along with the flight to quality buying interest early today, falling US treasury yields and steep declines in the dollar create a very broad strong bull case for gold which could produce significant upside price action. In retrospect, we are more confident in last week's lows becoming solid value than we are projecting gold reaching $2,000 this week. It should be noted that it has been a very long time since gold was perceived as "the hot market" but that potential is for real over the coming three sessions. Therefore, we suggest traders implement April near the money near to expiration April options against gold positions to ride through potential very wide swings in prices. Pushed into the market, we recommend long positioning over the coming days, but will consider purchasing June Gold puts later this week if prices extend the current rally straightaway.

Markets Await Cues From Fed Minutes

Volatility in the markets across all asset classes remained low as the 21st Feb was US President's Day Holiday. According to the Bullion Dealer in India, “Last week was pan ultimate week of volatility where the US Dollar and US Bond yields surged abnormally over fresh hawkish US-based Data, which further implied till June 2023. This data soared the mood of the US equities and precious metals to some extent even though both have shown the ability to digest the data and comments for Fed and also their future limitations to implement more.” During the weekend some geopolitical tensions mounted as the US ambassador warned China to cross redline if they directly support the military aid to Russia for its invasion of Ukraine. Hence the word of caution prevails across the Asian markets, which majorly opened flat. With a low profile day for precious metals, the only positive sentiment is the renewed geopolitical tension, especially between US and China. Gold prices hit their highest since April 2022 early this month, but have since lost about $120 after a slew of economic data showed signs of a resilient U.S. economy and a tight labour market, fuelling concerns that interest rates would stay higher for longer. “The price of the yellow metal has struggled in conjunction with the broader financial markets due to fears that the US central bank will continue to press the trigger to raise interest rates in its battle to beat inflation.” Shared the Gold dealers in Mumbai. Gold prices hovered around a six-week low on Monday, moving little as traders awaited more cues on U.S. monetary policy. Stubborn inflation, coupled with signs of strength in the jobs market, gives the Fed enough impetus to keep raising interest rates. The minutes of the Fed’s February meeting, due on Wednesday, is likely to reiterate the central bank’s hawkish stance. The main factor for metallic commodities - and global financial markets - is the policy of the US Federal Reserve. While there was some hope that the US central bank might soon hit the pause button on its quantitative easing efforts, the recent wave of inflation data has cast doubt on the inflation-lowering narrative. According to the Gold dealers in India, “Gold marked three straight weeks of losses, falling sharply from a nine-month high hit earlier this year as overheated inflation readings and signs of strength in the US jobs markets indicated that the Federal Reserve had enough impetus to keep raising interest rates in the near term. Still, gold and other precious metals could benefit from safe-haven buying later in the year, especially if slowing economic growth forces the Fed into reversing its hawkish Markets are now uncertain over where U.S. interest rates will peak this year, with some analysts positing a potential terminal rate of over 6%. Rising interest rates boost U.S. Treasury yields, which in turn increase the opportunity cost of holding non-yielding assets such as gold. The yellow metal plummeted in 2022 as the Fed embarked on an aggressive rate hike spree to curb inflation. Focus this week is also on the personal consumption expenditures price index reading for January. The data, which is the Fed’s preferred gauge of inflation, is expected to have remained steady in January from the prior month, indicating sustained inflationary pressure.

Gold Portfolio Allocation Slows Down

Up- down, high- low, see- saw- Gold was totally on a contradictory move in the past few days. Well we can’t blame the precious metal for this confused behaviour. A host of global factors were responsible for creating this wave in the prices of precious metals. Firstly we saw gold touching several month highs over a softening dollar which was a result of lower than expected U.S data numbers. Gold prices recovered slightly from a two-day losing streak on Thursday amid growing uncertainty over a potential recession and the path of U.S. monetary policy. U.S. retail sales and industrial production data for December read weaker than expected on Wednesday, ramping up concerns over a broader economic slowdown in the country as it struggles with tight monetary policy and relatively high inflation. Then came in, one of the most influential factor – Interest rate hikes. The latest message delivered by Chairman Powell expressed that the Fed intended to slow the pace of interest-rate hikes in 2023. This message was reinforced by Patrick Harker- the president of the Philadelphia Federal Reserve. Reuters news reported that “he‘s ready for the U.S. central bank to move to a slower pace of interest rate rises amid some signs that hot inflation is cooling off”. Though gold prices dropped on Tuesday, gold stalled its ongoing corrective downside, staging a decent comeback on Wednesday. The US Dollar has reversed its early gains amid falling US Treasury bond yields, which has helped Gold price recover lost ground. Meanwhile, Gold price continued to benefit from increased bets of smaller US Federal Reserve (Fed) rate hikes, although the US Retail Sales and Producer Price Index (PPI) will help shed more light on the same. However later in the day , live gold price turned negative, erasing gains made on weak U.S. economic data yet staying above the $1,900 level, as key members of the Federal Reserve signaled their intent to keep pushing interest rates higher to combat inflation. The Federal Reserve raised its benchmark rate more aggressively last year than any other time since the 1980s. Beginning in March 2022 the Fed raised rates at every FOMC meeting with four consecutive jumbo 75-bps rate hikes. This took the Fed’s benchmark rate from 0-25 bps in February to 425-450 bps by the end of the year. The Federal Reserve is currently anticipating that they will raise rates until they reach their target of 5 ¼ to 5 ½% this year. Still, overnight comments from several Fed members, including Loretta Mester and James Bullard, called for more interest rate hikes, given that inflation is still well above the central bank’s annual 2% target. They also forecast that U.S. borrowing rates will likely peak around 5%, although most members supported a slower pace of hikes. "High interest rates often suppress the price of gold, as other investments become more attractive. However, central bank buying, particularly from developing countries turning away the dollar, has propped up the gold price." is what bullion dealers in India have to say. Now when we look at portfolio allocation, we really need to see the best performing assets Vis a Vis its counterparts. And for gold, the strongest contender is crypto. Gold and crypto currencies have sometimes been seen as competing for investor attention Of course, both crypto and gold can be a means of payment, a store of value and either is 'no-man's' liability. With the world becoming multi-polar, the latter point is important for central banks, especially in emerging markets. To that point, in the run-up to the war in Ukraine, Central Bank of Russia had reduced USD holdings while at the same time boosting exposure to gold. Nonetheless, gold has a solid and credible history and is way superior compared to others assets in its class. Precious metals, including gold, silver, platinum and palladium, have grown in prominence in recent years as viable investment alternatives to include in asset allocations. Asset allocation seeks to increase risk-adjusted returns through diversification, based on the principle that different assets perform differently under varying market and economic conditions. For several decades, investors have achieved this through traditional asset classes, such as stocks, bonds and cash. Though, currently, investment allocation in gold has halted for awhile, we believe that as things start to settle, and we start to see the outcome of gold price today rises, not only in the U.S. but globally we're going to start to see how gold will fit back into people's portfolio.

Gold Welcome 2023 With a Bang!

Nothing or nobody welcome 2023 with a bang the way gold did. The yellow metal had a glittering start to the year as it hit another six-month high on Wednesday, 4th January. Safe-haven demand is featured so far this first trading week of 2023, amid shaky global stock markets, global economic growth worries, rising Covid infections, the dollar and inflation worries- MINUTES - Gold price clanged to gains around $1850 following the release of the Federal Reserve’s Open Market Committee (FOMC) minutes for the last meeting, which emphasized the need for the central bank to tighten conditions amid stubbornly high inflation levels. The Federal Reserve released the minutes from last month’s FOMC meeting. Unanimously Fed officials agreed that the central bank should slow the pace of its aggressive rate hikes. This would allow them to continue to ratchet up the cost of credit to curb inflation. They continue to be worried that market participants have an inaccurate perception of hoping for rate cuts this year. However, they left the door open to tightening even more aggressively if inflation rises. Gold and silver prices did back well down from their daily highs ahead of the early-afternoon release of the minutes from the last Open Market Committee meeting of the Federal Reserve (FOMC). Bullion dealers in India were wondering if the minutes might produce a hawkish surprise. The December minutes showed that policymakers agreed to slow the pace of interest rate hikes but added that a slowdown is not a “weakening commitment to achieving price stability on that inflation is already on a persistent downward path.”  Fed officials added that the US central bank had made significant progress in moving to restrictive policies and added that no rate cuts would be necessary for 2023. In the minutes, officials noted that a slower pace of rate hikes does not mean an easing of financial conditions. The gold market was able to hold some of its daily gains following the release of the Federal Reserve's December meeting minutes, with price trading above the $1,850 an ounce level. At the December meeting, Fed officials confirmed their commitment to bringing down inflation and warned against "unwarranted" loosening of financial conditions. The meeting minutes also revealed that officials were worried about any "misperception" in financial markets around their actions. RISING COVID INFECTIONS- The rallies in the gold and silver markets this week also come amid worries about rising Covid infections in China continuing to crimp the world’s second-largest economy. SLOW ECONOMIC GROWTH- Global stock markets were mostly firmer overnight. U.S. stock indexes are higher today. Still, there is keener trepidation in the marketplace this week. Potentially slowing economic growth in the major industrialized countries along with problematic price inflation in 2023 are keeping traders pensive and prompting safe-haven demand for the precious metals Gold prices ticked higher on Thursday, aided by a softer dollar, while market participants braced for U.S. jobs data that could influence the Federal Reserve’s policy trajectory. INFLATION WORRIES- Additionally, policymakers added that inflation risks could be more persistent and that further increases to the Federal Funds rate (FFR) would be appropriate. Gold price today is holding close to the highest level in seven months above $1,860 in the European session, accelerating the upbeat momentum, as the US Dollar tumbled across the board following a hot start to 2023. U.S. DOLLAR- the US Dollar remains under heavy selling pressure, as the European equities opened higher. Further, the sell-off in the US Treasury bond yields gathered steam and exacerbated the pain in the greenback, allowing the non-yielding Gold price to extend its uptrend into the fourth straight session. Bullion is seen as a hedge against inflation, but rising rates dull non-yielding asset's appeal. The short-term expectation is that live gold price will climb to $1,880 per ounce and trade broadly around $1,800 for most of the year[Text Wrapping Break] Gold has had a good start to the year, helped by a weaker dollar and expectations that the Fed might slow its pace of rate hikes. Recession risks and central bank buying should also support bullion this year.