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.

Play Cautiously and Take Utmost Care While Trading

Gold prices have risen nearly 16% this year, and by around $ 100 an ounce this week, as investors turned to the precious metal seen as a safe haven amid the bruising US-China trade and currency war.

As the week opened, PBOC of China fixed Yuan at 6.97% against the dollar and Trump and US Fed commented that China is acting as a currency manipulator. As mentioned previously that whatever Trump has done against China in its history is the worst trade war of this decade. There was obvious that pain boomeranged into the US markets and Dow slipped nearly 750 points on Monday- the worst single-day fall of 2019. And big time sufferers are US companies and global economies as they are on the verge of recession.

Gold hit $1485 and that was a major target that I made clear over the time and now this parabolic rise should stop unless China does something nasty to un-nerve.

The dimming global economic outlook, fuelled by heightening trade tensions between the U.S. and China are boosting gold’s appeal as a hedge against financial turmoil.

Gold is likely to show higher volatility and now overall range is expected to be $1500-$1550.

Despite Chinas commitment, the PBOC fixed Yuan at a higher level and fixed USD/CNY at 7.05% on Wednesday. Gold is once again moving to new calendar year highs and it hit $15 higher. Now gold is also behaving like currency when there is a losing streak for USD as the global currency status. These are extraordinary times and no matter how the USD index or the US data comes out, there is next big leg of rally possible on both.

On Thursday, gold showed an intraday volatility of +3%. This kind of fluctuation exhibited in the global markets too. Meanwhile gold hit 5.5 years high of %1522 and also made the single biggest gain of 3 years at 17.25. Moreover, the US-China trade war has been intensifying in a slightly uglier manner and this is adding fuel to the rally in gold prices.

Gold is at a record-breaking high in the domestic markets too. Gold prices on Thursday soared past the Rs 38,000-mark for or the first time rising Rs 550 to hit a fresh high of  Rs 38,470 per 10gm here in the capital.  In Mumbai, agency reports pegged the price of 10gm of standard gold (99.5 purity) at Rs 37,091, while pure gold (99.9 purity) cost Rs 37,240 on Thursday.

Gold remains relevant given the elevated economic and geopolitical risks. Investors will continue to shift their strategic portfolio positions in favor of gold. But Our Managing Director, Prithviraj Kothari advises all the investors to play cautiously and take utmost care while trading in these high volatile patterns.

Gold Is Still Very Reactive to Daily News

The increase in the price of gold is not only limited to US dollar; it is pretty much the same in virtually all major currencies in the world, Recently Indian Government has decided to increase import duty on gold. Our Managing Director- Prithviraj Kothari has advised the market to wait for more stability. There are quite a few reasons why the gold bull market might indeed have returned and that the latest price action is not just bubble.

Gold traders limited the range view before the testimony and were eyeing on $1390-$1392 once again as a final support.

Gold spent most of the week under $1,400 even though China added 10 tonnes to its reserves and Poland reported a large acquisition of 100 tonnes.

Wednesday gold moved decisively up to $1,426 on the back of Federal Reserve chair Jerome Powell's dovish comments at his semi-annual monetary policy testimony but then moderated with US inflation coming in above expectations overnight, although it has held above $1,400.

Spot gold rose 1.5% on Wednesday after Fed Chair Jerome Powell’s dovish remarks, where he confirmed the U.S. economy was still under threat from disappointing factory activity, tame inflation and a simmering trade war, and said the Fed stood ready to “act as appropriate.”

This statement weighed on the dollar. The U.S. currency against major other currencies extended declines for a second session.

All eyes were focussed on Powell over the past week as he presented his key semi annual monetary policy before the congress. What needs to be remembered is that it was a two-day testimony and maybe the last key event before locking the 28th- 29th July verdict. The extent of dovishness depended on change of words that he put on soon after the strong US payrolls.

On the second day of the testimony, Powell almost reassured that he is not changing the stance of June (which was dovish and rate cut prone) as he sees lot of headwind and slowdown especially the trade war-related tensions that are affecting the global growth. Morgan Stanley however thinks that the Fed will cut 0.5% on 25th July.

Gold prices fell on Thursday, erasing gains made early in the day after stronger-than-expected consumer inflation in the United States cast doubts whether the U.S. central bank will cut interest rates as aggressively as expected.

Spot gold dipped 0.85% to $1,406.8 per ounce, dropping nearly $6 after U.S. consumer prices demonstrated a pick-up in underlying inflation, increasing in June by the most in nearly 1-1/2 years.

The core U.S. consumer price index, excluding food and energy, rose 0.3% in June, data showed on Thursday, the largest increase since January 2018. The U.S. Federal Reserve had last month downgraded its inflation projection for the year to 1.5% from the 1.8% projected in March.

Bullion rates were quick to slump following the data, shedding nearly 1% in the latter part of its session, with the dollar erasing some losses.

Gold prices inched higher on Friday as investors shrugged off concerns that stronger-than-expected consumer inflation in the United States could influence the U.S. central bank’s decision on aggressive monetary policy easing.

Spot gold rose 0.3% to $1,407.31 per ounce as during trading sessions, having touched $1,412.20 earlier in the session.

Fed policymakers are scheduled to meet on July 30-31, where investors will look for further cues on monetary policy easing. Nonetheless, gold remains a valuable asset amid rising geopolitical tension, growing macro uncertainty and a maturing economic cycle. The market expects synchronous rate cuts globally, which will make non-yielding gold attractive for investors.

Gold is still very reactive to daily news but it is forming a trading channel of $1,380 to $1,440 and the longer this continues the better - the market needs to consolidate before attempting another leg higher, which we feel is the more likely outcome than it breaking back down.

Gold rises to Rs.29,750 on firm global cues, wedding season demand

Gold prices rose Rs. 200 to Rs. 29,750 per 10 grams at the bullion market here today on persistent buying by jewellers boosted by firm global prices according to RiddiSiddhi Bullions Limited.

Gold prices have been on the rise since January 28 and have gained Rs. 600 since then, added the Mr. Prithviraj Kothari, Managing Director, RSBL

Silver also crossed the Rs. 42,000 level by rising Rs. 300 to Rs. 42,200 per kg on increased off take by industrial units and coin makers.

Bullion traders said that besides a firm trend overseas, steady buying by local jewellers amid the ongoing wedding season mainly kept the precious metal prices higher.

Gold rose 0.59 per cent to $1,208.50 an ounce in Singapore today. The precious metal had risen by 1.25 per cent to $1,210.30 an ounce and silver went up by 2.75 per cent to $17.55 an ounce in New York yesterday, said a Bullion spectator.

In the national capital, gold of 99.9 and 99.5 per cent purity advanced by Rs. 200 each to Rs. 29,750 and Rs.29,600 per 10 grams respectively.

Sovereign, also went up by Rs. 100 to Rs. 24,400 per piece of eight grams.

In sync with gold, silver ready rose further by Rs. 300 to Rs. 42,200 per kg and weekly-based delivery by Rs.395 to Rs. 41,870 per kg.

On the other hand, silver coins remained steady at Rs. 72,000 for buying and Rs. 73,000 for selling of 100 pieces as per the statistics provided by RSBL.