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The primary purpose of this blog (Prithviraj Kothari - MD, RSBL | Bullion market blog) is to educate the masses of the current happenings in the Bullion world. This blog contains my opinion, which is not to be construed as investment advices. Information provided in these blogs is intended solely for informative purposes and is obtained from sources believed to be reliable
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Showing posts with label Gold. Show all posts
Showing posts with label Gold. Show all posts
Saturday 29 October 2016
Monday 3 October 2016
VOLATILE MARKETS: RSBL
By Mr. Prithviraj Kothari, MD, RSBL
Markets
were volatile as the week ended and this volatility was reflected in the
movements of gold prices.
Gold
prices fell on Friday, after shuffling between gains and losses as investors
weighed concern about Europe's banking woes against heightened expectations of
a Fed rate increase in December.
The yellow
metal had fallen to as low as $1,311.95 on Friday – the lowest since September
21 – following news that Deutsche Bank was near a settlement with US
regulators.
Amidst
rise of uncertainty over the health of a financial industry, traders have
shifted focus to gold to provide what it best does- safe haven.
Traders are
seeking for the yellow metal as uncertainty prevails after the news reports by Bloomberg
that 10 hedge funds that do business with Deutsche Bank have pared their
exposure. Its shares fell to a record low, and European and Asian equities
retreated. There’s heightened haven buying as anxiety grows over the German
lender, Australia & New Zealand Banking Group Ltd. said in a note.
Investors
had been nervous about the uncertainty surrounding Deutsche Bank after some of
its clients, among them several big hedge funds, were reported to have
withdrawn securities or cash from the German lender amid concerns about its
stability and their exposure.
But, on
Friday, safe haven demand for gold dwindled after stocks in major markets largely recovered from a
sell-off on easing concerns about Deutsche Bank. This lead to a fall in gold
prices. Spot gold was down 0.3 percent at $1,316.32 per ounce during Friday
trading hours.
As the
session wore on, the focus turned to increasing expectations that the U.S. Federal
Reserve will raise rates by the end of the year. Fed-funds futures, used to bet
on central-bank policy, showed investors assigned a 61.6 % likelihood to a rate
increase in December, up from 52% the previous day, according to CME data on
Friday.
Expectations
for higher rates tend to weigh on gold, which yields nothing and struggles to
compete with Treasury’s and other investments when borrowing costs rise.
Hence
there were sluggish sentiments in the market as it might have to edge lower before
finding firm support.
A collapse in Deutsche Bank's already beaten stock
had sent Europe into a fresh tailspin early on Friday and left world equity
markets slipping towards their worst week in three months. Safe-haven demand
had sustained bullion until the market turned its attention to U.S. economic
data and important numbers coming from China.
The Commerce Department said on Friday that U.S.
consumer Spending fell in August for the first time in seven months while Inflation
showed signs of accelerating, mixed signals that could keep the Fed cautious
about raising interest rates.
Let’s have a look on the key economic indicators-
US
- In US data released Friday, the core PCE price index was as expected at 0.2 percent but personal spending and personal income undershot at 0.0 percent and 0.2 percent.
- The Chicago PMI was better than expected at 54.2. Revised UoM consumer sentiment and revised UoM inflation expectations at 91.2 and 2.4 percent respectively were also better than forecasts.
- A string of manufacturing PMI numbers are due from Eurozone countries as well as the US later today. The ISM manufacturing PMI, construction spending, ISM manufacturing prices and total vehicle sales from the US will also be of note.
- In US data released on Thursday, second quarter final GDP growth came in at 1.4 percent quarter-on-quarter, slightly better than expectations of 1.3 percent. Weekly unemployment claims for last week was also better than expected at 254,000, against a forecast of 260,000.
- Pending home sales for August, however, fell 2.4 percent month-on-month – a 0.1 percent decline was called for.
China
- China’s official manufacturing PMI for September was at 50.4 (close to expectations of 50.5),
- China’s manufacturing sector remains in expansion mode alongside stable production and demand growths, the NBS said.
- But the foundation of the manufacturing sector’s stable growth is not solid as firms continue to face operating difficulties while industries eliminate excess capacities, the Bureau cautioned.
- The country’s official non-manufacturing PMI, which represents the services sector was at 53.7 in September, was up from August’s figure of 53.5.
- The official PMIs added to the continued Chinese growth story and risk on mood in markets, National Australia Bank said on Monday.
- For the time being The precious metals are looking quite diverse with gold prices struggling to rise and when they do they struggle to hold on to any gains
- For the time being The precious metals are looking quite diverse with gold prices struggling to rise and when they do they struggle to hold on to any gains.The primary purpose of this article by Mr. Prithviraj Kothari is to educate the masses of the current happenings in the Bullion world.Previous blog:
"Buy And Hold Gold: RSBL"
http://riddisiddhibullionsltd.blogspot.in/2016/09/gold-buy-and-hold-rsbl.html
Tuesday 27 September 2016
GOLD- BUY AND HOLD: RSBL
by Mr. Prithviraj Kothari, MD, RSBL
Bullion has rallied 26 percent in 2016, recovering from three years of
losses, as low or negative interest rates have strengthened demand. Political
uncertainty has also played a part, with the U.K.’s vote to quit the European
Union spurring haven demand. Forecasters including Singapore-based DBS Group
Holdings Ltd. have said that the U.S. contest may buttress prices amid concern
about the possible implications of a Trump presidency.
Gold may be in for a bumpy ride in the final quarter as Republican candidate
Donald Trump now has a 40 percent chance of winning the presidential election
and investors will be preparing for the possibility of higher U.S. interest
rates, according to Citigroup Inc. A probable victory of Donald Trump increases
the chances of a single U.S. hike by the end of 2016.
But if it happens otherwise, then gold prices are likely to steady during
25-29 September after the US Federal Reserve decided to leave interest rates
unchanged, according to analysts.
Bullion has been provoked from inertia after Fed rate concerns had helped
wipe out gains for the quarter.
There is once again an inflow of capital in the market as low borrowing
costs in the U.S. and economic stimulus by central banks from Japan to Europe
drive demand for the precious metal as a store of value.
Over the previous week, gold achieved the best performance since July 2016
with a 2.4% rise, while the US dollar index recoded the worst performance,
reaching 95.472 against a basket of currencies.
The precious metal is heading for the biggest weekly advance since July
after U.S. central bankers opted to leave interest rates unchanged while
reining in their outlook for future increases.
Gold prices edged lower on Friday, but notched the strongest weekly advance
in almost two months after the Federal Reserve held off on raising interest
rates and scaled back the number of rate hikes it expects next year.
This has once again pushed gold prices upwards and traders are no into the
buy-and-hold mode for gold.
The precious metal is sensitive to moves in U.S. rates, which lift the
opportunity cost of holding non-yielding assets such as bullion. A gradual path
to higher rates is seen as less of a threat to gold prices than a swift series
of increases.
Meanwhile, investors will be focusing on a series of important events lined
up this week that play a pivotal role in influencing gold prices.
- A pair of speeches from European Central Bank President Mario Draghi is to testify before the Committee on Economic and Monetary Affairs of European Parliament, in Brussels.
- For fresh hints on whether the ECB will step up monetary stimulus in the coming months to boost inflation and prop up the economy.
- Speech by Bank of Japan Governor Haruhiko Kuroda will be eyed in wake of last week's decision by the BOJ to modify its policy framework
- Focus will also be maintained on the first U.S. presidential debate on Monday between Democratic nominee Hillary Clinton and Republican hopeful Donald Trump
- Other speeches to be given by
-Swiss National Bank Chairman Thomas Jordan
-Bank of Canada Governor Stephen Poloz
-Federal Reserve Vice Chair Stanley Fischer
-BoJ Governor Haruhiko Kuroda is to speak in Tokyo.
- U.S. is to release data on new home sales, private sector data on consumer confidence, publish data on durable goods orders, to publish final figures on second quarter growth
- Fed Chair Janet Yellen is scheduled to testify before the House Financial Services Committee on regulation and supervision, while St. Louis Fed chief James Bullard is to speak in St. Louis.
- The Bank of Japan's big policy review is likely to see more QE and negative rates in the long run.
- Germany is to publish preliminary inflation data and a report on unemployment change.
- Japan is to release data on inflation and household spending.
- China is to publish its Caixin manufacturing index.
- Germany is to release data on retail sales.
- The U.K. is to report on the current account and publish revised data on second quarter growth.
- The euro zone is to release preliminary data on consumer inflation.
- Canada is to publish data on economic growth.
- The U.S. is to round up the week with data on personal income and spending, a report on business activity in the Chicago region and revised data on consumer sentiment.
Now that series of
events are scheduled for the week we expects markets player to be alert and
markets to be volatile.
The primary purpose of this article by Mr. Prithviraj Kothari is to
educate the masses of the current happenings in the Bullion world.
Previous blog:
"BULLISH SENTIMENTS FOR GOLD: RSBL
http://riddisiddhibullionsltd.blogspot.in/2016/09/bullish-sentiments-for-gold-rsbl.html
"BULLISH SENTIMENTS FOR GOLD: RSBL
http://riddisiddhibullionsltd.blogspot.in/2016/09/bullish-sentiments-for-gold-rsbl.html
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