Pages

RSBL Gold Silver Bars/Coins

Showing posts with label Platinum. Show all posts
Showing posts with label Platinum. Show all posts

Friday, 6 October 2017

September proves to be the worst month of 2017 for gold so far

September was an action-packed month, with North Korean rockets and a succession of monster hurricanes all coming at the markets almost at the same time. Not forgetting the comments coming out from the Federal Reserve that contributed to thefrenzy by giving a clear signal of a December rate hike. In the process, it perhaps single-handedly helped the dollar index recover from a three-year low hit earlier in the month.

Amid a resurgent dollar, the month of September proved to be worst for gold since November 2016. However, as geopolitical tensions soar, with the standoff between the U.S. and North Korea probably topping the list, demand for precious metals surged with Gold ETF holdings rising most since Feb 2017.



Last week, gold prices ended lower on Friday as weak U.S. consumer spending and inflation data did little to alter expectations for a third interest rate increase by the Federal Reserve this year.
The dollar has risen in recent weeks as investors grow more optimistic about the prospect for U.S. rate hikes and tax cuts that some expect to boost the U.S. economy.

Data on Friday showed that
U.S. consumer spending barely rose in August.
Inflation also remained sluggish with the core personal consumption expenditures price index rising 1.3% year-on-year, slowing from 1.4% in July.
The core personal consumption expenditures price index is the Fed’s preferred inflation measure and has a 2% target.

The data did little to temper rate hike bets after Yellen indicated earlier in the week that the central bank was sticking to plans for a third rate hike this year and three in 2018.

The metal recorded its biggest monthly decline so far this year in September, despite netting a quarterly rise of nearly 3 percent partly due to geopolitical tensions including North Korea’s missile tests.

The U.S. currency recorded its best week of the year on Friday, despite benign inflation data for August, as expectations that the Fed would raise interest rates again in December loomed large after Fed Chair Janet Yellen said the central bank planned to stay on its current rate hike path.
Higher interest rates tend to boost the dollar and push bond yields up, weighing on greenback-denominated gold

The dollar’s rise paused on September 28 and 29, but was seen gaining momentum on Monday morning.

Gold slipped to its lowest in nearly seven weeks early on Monday, 2nd October as the U.S. dollar rose and equities gained, while growing expectations for a Federal Reserve interest rate hike in December also added to pressure.

Spot gold was down 0.3 percent at $1,274.90 an ounce by 0353 GMT, after earlier touching its lowest since mid-August at $1,273.55.

Gold prices fell in Asia on Monday as the dollar gained and the euro dropped as investors mulled the implications of the disputed referendum on Catalonia independence in Spain on the euro zone and a sentiment survey out of Japan in a thin trading day with China's markets shut for the week and holidays regionally expected to see thin flows.

Elsewhere,The Bank of Japan released its Tankan survey for the third quarter with investors focused on the large manufacturer’s index as it rose to 22, compared with an expected reading of 18.

This week, comments by Fed Chair Janet Yellen will be closely watched for further hints on the timing of the next rate hike along with Friday’s U.S. jobs report. Market watchers will be looking ahead to remarks by European Central Bank President Mario Draghi on Wednesday.

Gold, silver and platinum prices continue to correct and the stronger dollar and lull in tensions over North Korea, seem to be weighing on prices. We would let the corrections run their course, but the North Korean situation is likely to escalate again at some stage, so the next rally in gold prices may not be that far away.

Wednesday, 1 March 2017

Effect of Presidential Election and BREXIT on Bullion Market

So Far, bullion has witnessed a 9.6 percent rise in prices mainly due to the prevailing political uncertainty over Trump’s unorthodoxy, European elections and Brexit ruffle confidence.
The yellow metal reached near a four month high last week amid intensified political uncertainty in the U.S. and the EU.

All precious metals have made gains, gold, silver, platinum and palladium, as both the euro and the dollar weakened over the week. Let's take a look as to what factors contributed to the rise and how far an important role will they play in the near future.

US uncertainty- Gold prices have hit a four month high to reaching their highest level since Donald Trump won the election.


The metal is considered as a safe haven asset for money and values rise when markets are in turmoil or in times of uncertainty. This sentiment has raised the demand for gold especially from investors thus pushing  its prices higher.

As markets await a major speech by US president Donald Trump, we saw equates retreating and dollar hesitating thus strengthening gold prices and shaking off most of the losses incurred following the surprise election result, as markets continue to unwind Trump trade.

Fed Rate Hike- Last Wednesday's release of minutes from the last FOMC meeting on January 31 – February 1 struck a slightly more hawkish tone as Fed members discussed the appropriateness of another rate hike 'fairly soon.' concerns over the risks and uncertainties surrounding the Trump Administration's fiscal stimulus plans as well as a strengthening US dollar tempered that hawkish stance. In the end, markets were once again left with continued ambiguity regarding the pace of monetary policy tightening in the coming months. Indeed, the Fed Fund futures market still saw a low percentage probability of a March rate hike – in the high-teens to low-20's – a day after release of the FOMC minutes. This sustained policy uncertainty helped weigh on the dollar while boosting the price of gold further. Reduced expectations of a US rate hike in March following the release of the minutes from the US Federal Reserve's last meeting are also helping gold.

EU elections- Despite the virtually relentless rally in US and global equity markets, geopolitical risks continued to abound, particularly in Europe. Article 50, which officially begins the process of separation between the UK and European Union ('Brexit'), is slated to be triggered no later than in March. A former European Commission official has recently stated that the triggering of Article 50 could lead to a 'complete breakdown' of UK/EU relations.

Additionally, France's far-right, anti-EU presidential candidate, Marine Le Pen, is leading in polls for the first round of the upcoming French elections. Although she is not currently favored to win against frontrunner Emmanuel Macron, any surprise victory by the populist/nationalist Le Pen will undoubtedly lead to serious questions about the future of the EU.

Geopolitical worries and political concerns in the EU continue which is leading a flight to safety bid in gold futures market and gold exchange traded funds (ETFs) and demand for safe haven gold bullion.

Dollar- The dollar looks vulnerable due to the uncertainty about US President Donald Trump and the new U.S. administration's policies. Overnight Trump attacked China and accused the Chinese of being ‘grand champions’ of currency manipulation.

This alone is quite bullish for gold. It does not create confidence about trade relations between the world's two biggest economies and it suggests that we may be about to embark on the next phase of the global currency wars.

The US president is to deliver his first speech to US Congress next week, after US Secretary of the Treasury Steven Mnuchin on Thursday said the impact of fiscal stimulus this year on the economy might be limited.

Amid these uncertainties in Europe as well as those in the US under the Trump Administration's still-hazy policy trajectory and the Fed's murky monetary policy, gold has continued to extend its sharp uptrend that began after price bottomed out around the $1125 support area in late December.

Tuesday, 31 January 2017

Trump policy under trouble as Gold goes weaker against Dollar

Gold prices crawled higher on Monday on a weaker dollar and as uncertainty over US policy under President Donald Trump stoked safe-haven demand, although gains were curbed with many in Asia on holiday for the Lunar New Year, said Mr. Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited.

Spot gold had edged up 0.1 per cent to $1,191.98 per ounce by 0735 GMT, while US gold futures were up 0.24 per cent at $1,191.2.


Trump's administration on Sunday tempered a key element of his move to ban entry of refugees and people from seven Muslim-majority countries in the face of mounting criticism and protests in major American cities.

Some of Trump's statements and a lack of detail on policy have led some investors to opt for gold, often seen as an alternative investment in times of geopolitical and financial uncertainty.

The executive order signed by Trump has raised the uncertainty even higher.
The upturn in safe-haven buying comes at a time when physical demand has been sapped due to the Lunar New Year holiday in Asia, added Kothari.

The dollar index, which measures the greenback against a basket of currencies, was down 0.12 per cent at 100.410.

The market for the precious metal has also been buoyed by sluggish US economic data released on Friday.

Economic growth in the country slowed sharply in the fourth quarter as a plunge in shipments of soybeans weighed on exports, the data showed.

"That puts just enough doubt into the industry's mind about the timing of (US interest) rate hikes," Hynes said.

Meanwhile, holdings of the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust GLD, remained unchanged on Thursday from Wednesday.

Speculators crimped their net long position in gold futures and options, following two straight weeks of increases, data showed. They also raised their silver holdings to the highest since early November.

Spot silver was up 0.23 per cent at $17.16 per ounce.

Platinum shed 0.14 per cent to $980.75 per ounce, while palladium dropped 0.5 per cent to $732.4 per ounce. Palladium touched its lowest since Jan. 4 at $708.97 an ounce in the previous session.


Sunday, 17 May 2015

RSBL: GOLD CONTINUES TO RISE!

                                                           By Mr. Prithviraj Kothari, MD,RSBL




Overall, it was a good week for gold as prices rallied with a weekly gain of 3.1 percent, following a spate of negative numbers from the US which unsettled investors and weighed on the dollar.
Let’s have a look at the important highlights of the week:
  •  US retail sales on Wednesday at 0.0 percent missed consensus of 0.3 percent while the core figure at 0.1 percent fell short of the expected 0.4 percent gave the yellow metal the impetus to move higher
  • Holdings in the world's largest gold backed exchange traded fund, SPDR Gold Shares, fell 0.61 percent on Thursday to a four month low of 723.91 tons
  • Physical buying slowed in Asia as higher prices kept some consumers away. In China, premiums eased about 50 cents to $1 an ounce over the global benchmark on Friday, from premiums of $2-$3 earlier in the week
  • Industrial production in the U.S. declined in April, reflecting a drop in mining and utilities output, a report from the Federal Reserve showed Friday.
  • Hedge fund and money managers increased net long positions in Gold and Silver ended May, 12th - U.S. Commodity Futures Trading Commission data showed on Friday.
  • Geopolitical tension surged in Iraq where Islamic State militants said they had taken full control of the western Iraqi city of Ramadi on Sunday in the biggest defeat for the Baghdad government since last summer. 
  • A surprise drop in US producer prices in April, signaled heightened disinflation risks plaguing the world’s biggest economy
  • Silver has been a part of 8% rally which places it strongly in the channel where it leads the precious metals group with gains over the whole year. 

There have also been reports that Europeans are snapping up gold in fear that a Greek exit from the euro zone could wreak havoc on the economy. 

While on US front, The longer the flow of poor data exists, the greater will be the doubts on US economy.  Economists predicts that the Fed may raise short term interest rates in September while the other chunk of the market predicts that the hike may get delayed until later in fourth quarter or even next year.

I do agree that US data continues to dominate the market's movements with physical support going a bit low as the price rise, but for this rally to sustain, I strongly feel that all the factors of momentum need to be pressed at the right time. Otherwise the rally is bound to fade. A key technical resistance of US$1238 needs to be taken out of GOLD.

If we see all the factors that are influencing Gold and precious metals price movement, one common rule is generated which needs to be followed. You should not abandon precious metals be it Gold or Silver or Platinum. They are rare, have the status of safe haven, central banks monetary policy support and used in something that everybody loves: jewellery. Every buy on dips is worth the money.


TRADE RANGE:

METAL
INTERNATIONAL
DOMESTIC
GOLD
$1210 - $1250 an ounce
Rs.27,000 - Rs.29,000 per 10g
SILVER
$17.00 - $18.00 an ounce
Rs.39,000 - Rs.42,000 per kg



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 -


Sunday, 5 April 2015

PLAYING GAMES WITH GOLD?

                                                          By Mr. Prithviraj Kothari, MD, RSBL




A truncated week due to Good Friday was not so good for US with significantly weaker Non Farm payrolls report. Moreover many trading centers remain closed for Easter Monday. Anyways, let’s hit back to the Gold price rise over the week and some more understanding on US economic indicators that hit the market.

The first weak data coming from US on Tuesday was the contraction in Chicago PMI for second month in succession. Following February's five year low of 45.8, analysts were again disappointed as March's print came in well below expectations at 46.3 (exp: 51.7). The March figures takes the quarterly average to 50.5 over Q1 2015, the lowest quarterly result since Q3 2009 and markedly down on the 61.3 we saw in Q4 2014

On Wednesday, Gold prices were again tested at US$1180 – 81 support. For the third time this support has withstood the selling. But the ADP data from US that came in early took the precious metals complex to nearly day’s high in no time. Gold had a super boost of US$9 to US$1194 in no time and the way was just up after that by reaching an intra-day peak of US$1208. According to the ADP, U.S. private employers added the smallest number of workers in more than a year during March. Private payrolls rose +189k (+225k expected) according to their employment report.
U.S. national factory activity hit a near 2 year low in March according to the Institute for Supply Management (ISM). The ISM's manufacturing PMI index fell for a fifth consecutive month to 51.5 in March (52.5 expected) from 52.9 in February and declining each month since hitting 57.9 in October. The ISM pointed to various factors including the weather, higher health-care costs and the stronger dollar as reasons for the slowdown. 

Then came in the 2 conflicting reports:

On Thursday, US unemployment claims dropped 20,000 to 268,000 in the week ended March 28, the lowest reading since January 24 and much better than the 286,000 forecast.

On Friday, United States employers added the fewest number of jobs in more than a year during March with non-farm payrolls increasing a mere +126k (+245k expected), less than half February's pace and the smallest increase since the polar vortex of December 2013. While the unemployment rate was unchanged at 5.5 percent, the U.S. Bureau of Labor Statistics reported today that ended 12 straight months of job gains above 200,000, the longest streak since 1994.

The main reasons for the negative labor report were:

1.    Poor Weather- Poor weather conditions during the winters created a sort of slag in the labor market

2.    Stronger Dollar- strong dollar created a great impact on the employment numbers

3.    Energy sector- This sector has been having a considerable impact on the employment numbers, this sector witnessed a decline of 11000 employment numbers in March. The industry has lost 30,000 jobs thus far in 2015, after adding 41,000 jobs in 2014. The employment declines in the first quarter of 2015, as well as the gains in 2014, were concentrated in support activities for mining, which includes support for oil and gas extraction.

The dollar tumbled as much as 1 percent against the euro after the significantly weaker-than-expected report, while U.S. Treasuries rose, with benchmark 10-year yields hitting nearly two-month lows.

Undoubtedly, this does act as a super boost for Gold and other precious metals as the negative data does have a chance to delay the Fed’s decision to opt for the first increase in U.S. interest rates in nearly a decade, which is expected later this year. Gold tends to suffer when rates rise, as that increases the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which the metal is priced.

On the domestic front, gold has also found support from strong physical demand from India, currently the world’s biggest gold consuming country with gold imports touching to 70 tonnes in the month of March, putting total imports in the fiscal year that has just ended at 638 tonnes.

Platinum has been a real lager in the whole precious metals group by being down just over 5%. Silver too had been heavily sold in 2014 but having a good push up by nearly 3%.

The reports that were released on Friday will show its effects and reflections on Monday as international open for trade. I am sure that there would be a price push to US$ 1220 (Approximately) testing its key resistance.

Note: A break above US$1238 would surely give a fresh bullish interest. Until then, traders would wait for FED’s decision on FED rate hike barring the price moves depending on the economic indicators.

TRADE RANGE:

METAL
INTERNATIONAL price
DOMESTIC price
GOLD
1184$- 1223$ an ounce
Rs.26,500- Rs.28,000 per 10gm
SILVER
16.50$- 18.00$ an ounce
Rs.37,000- Rs.40,000 per kg




“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: Yemen's Push While Fed's Caution"
http://riddisiddhibullionsltd.blogspot.in/2015/03/fed-takes-gradual-and-cautious-route.html

Sunday, 4 May 2014

UKRAINE REIGNS OVER GOLD PRICES!!


                                    - By Mr. Prithviraj Kothari, MD,RSBL




Gold has been showing quite interesting movements lately. 

Last week, gold was lying at a three month low of $1,270 an ounce post the economic recovery and reduced safe haven appeal. This negative sentiment continued this week as Gold rose slightly but remained below $1,300 an ounce on Tuesday as the market focused on the U.S. Federal Reserve's policy meeting and expectations for strong U.S. data, with prices underpinned by uncertainty over Ukraine. The Fed did give a positive and upbeat assessment of the U.S economy and announced another cut in its massive bond buying program.

Following the previous 3 tapers, The US Central Back reduced its monthly asset buying to $45 billion for the fourth time on 30th April. This $10 billion cut has compelled the market players to believe that further reductions in measured steps are likely.

Positive economic growth was visible from the reports released during the week.  Gold further dropped post the release of the payrolls data, which showed that U.S. employers boosted payroll in April by the most in two years. Moreover unemployment rate stands at 6.3% which is much lower as compared to 6.7% last month.

This downtrend was further supported, as outflows from the world biggest  bullion fund resumed after a one and a half week halt. Assets in the SPDR Gold Trust, the biggest bullion-backed ETP, fell 0.3 percent to 785.55 metric tons during the week, the lowest level since January 2009, according to data on its website. Outflows totalled 25.1 tons last month, more than offsetting combined gains of 19.9 tons in February and March

Spot gold fell 0.2 percent to $1,289.10 on Thursday, after losing 0.4 percent on Wednesday. Trading was thin as several Asian markets, including China, Hong Kong and Singapore, were closed for the Labour Day holiday.

However, traders remained cautious in expectation of further developments in the Ukrainian crisis and Friday changed the world scenario for gold as increased geo political tensions gave the yellow metal that much needed push. Demand for gold stepped up as the flaring of Ukraine's violence started making markets nervous and pushes the international price of the Gold above $1300.

Ukraine sent armoured vehicles and artillery to retake Slovyansk, a stronghold for pro-separatist forces, defying President Vladimir Putin’s demand to pull back troops with Russia’s army massed across the border. 

Acting President Oleksandr said that  many pro-Russia rebels had been killed, injured and arrested in the eastern city of SlovyanskIn a statement, he said the operation in the rebel-held city was not going as quickly as hoped. Separatists shot down two Ukrainian army helicopters, killing a pilot and a serviceman and further injuring seven.

The UN Security Council met in emergency session at Russia's request. In fact, catastrophic consequences have been signalled by Moscow's ambassador if Kiev's military operation in eastern Ukraine were not stopped.

Investors have now put the Ukraine issue above everything. As the week began gold was seen moving down post the Fed tapering, but rising geopolitical tensions and heavy short-covering helped bullion reverse an initial sharp sell-off. 

2014, witnessed 8.4 percent gain in bullion amidst signs of faltering U.S. economic growth and mounting political crisis in Eastern Europe. Any elevation in the ongoing crisis will give a further push to gold.

After nearly three months of continued strikes over wages, Platinum mines in South Africa are still far away from solution. This is significantly increasing the buying interest and pushing prices to new levels.

What to expect next week:
1. ISM non-manufacturing PMI on Monday
2. Fed's Yellen testify to Join Economic Committee on Wednesday
3. ECB press conference on Thursday. 

The trade range for gold and silver is expected to be as follows-

In the international markets gold and silver are expected to range between $1277 - $1320 and $18.15 - $21.00 respectively. While in the domestic markets gold and silver are expected to move in the range of INR 29,000 - INR 30,500 and INR 41,000 - INR 44,000 respectively.



The primary purpose of this article by Mr. Prithviraj Kothari is to educate the masses of the current happenings in the Bullion world.
- Previous article- "Gold Gains Momentum, Investors Gain Confidence!"
http://www.riddisiddhibullionsltd.blogspot.in/2014/04/gold-gains-momentum-investors-gain.html

Saturday, 19 April 2014

Gold prices off the Route?

                                        - by Mr. Prithviraj Kothari, MD, RSBL






Gold prices have been battered over the week. Starting with a high of $1330 to a low of $1282 and giving a close of $1294 has brought Gold prices back to its major support $1280. ($1280 acts as a strong support for Gold, below which Gold prices could attain new lows).

The week started on a stronger footing carrying the upward trend of the last week.  Gold prices gained to a three week high on Monday on renewed concerns over the escalation of hostilities in Ukraine that prompted its safe haven appeal. Geo political tensions escalated as violence between pro-Russian separatists and Ukrainian government forces grew. Moreover gold prices were further supported over the news that a Russian fighter aircraft made repeated cross range passes near a US ship in the Black Sea. Apart from this SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, said its holdings rose 1.80 tonnes to 806.22 tonnes the first inflow since March 24 acted as a positive factor.

But the upward trend was short lived. $1330 proved to be a crucial stage which wasn’t broken and Gold prices plummeted. US economic indicators showed positive signs starting with US retail sales. According to Bloomberg survey, U.S. retail sales probably accelerated in March, boosted by car purchases that indicate demand is recovering from a winter-led slowdown earlier this year.

Other factors that added to Gold and Silver price fall were:

U.S industrial production-
         Above expectations March industrial production data hinted that the US economy was starting to emerge from a weather-induced slowdown suffered over the initial stages of calendar 2014. Adding weight to this belief was the uplift seen in capacity utilization levels over the month.

EU industrial production-
        Euro zone industrial output edged higher in February, official data showed Monday, in line with recent data showing a very modest economic recovery in the single currency bloc.

U.S CPI, U.S housing starts and building permits-
        U.S. Consumer Prices rose slightly higher while the U.S. housing starts rose 2.8% in March to a seasonally adjusted annual pace of 946,000, fueled by growth in single-family homes, the Commerce Department said Wednesday. Starts for February were revised higher to a pace of 920,000 from an initially reported 907,000.

Philly Fed index-
         A reading of manufacturing sentiment in the Philadelphia region improved in April, according to data released Thursday. The Philadelphia Fed’s manufacturing index rose to a reading of 16.6 in April from 9.0 in March, stronger than a Market Watch-compiled economist forecast of 10.0.

Overall, Gold dropped nearly 1.85% this week.

Though the various reports released from US did show signs of a recovering economy, Federal Reserve Chairwoman, Janet Yellen restated that she expected interest rates to remain very low until the recovery is on a more secure footing and the American economy is more fully involving available workers and other resources. The Obama administration told asset managers last week that it was planning additional sanctions against Russia over the conflict in Ukraine. Some of the supporting factors that lead Gold prices recover from its support level of $1280.

Looking at the current market conditions, I feel that western countries are reducing their holding on every rally while the same is being absorbed by the physical demand on Asia. It’s a see saw battle where one reduces and one increases. Geopolitical tensions will act as a strong support for Bullion metal prices apart from the physical demand.

The labour dispute which broke out in January that shut most of the platinum mines in South Africa is extending the longest shortfall in global production since 2005. The strike by more than 70,000 South African workers will continue as long as companies refuse to improve wage offers, Joseph Mathunjwa, president of the Association of Mineworkers and Construction Union, said April 15. The workers want basic monthly pay boosted to 12,500 rand over four years, which the producers say they can’t afford after production costs jumped 18 percent annually in the last five years, as wage and electricity costs rose. Many laborers live in shacks made of iron sheeting. They share toilets, don’t always have water or power, and many spend much of their income servicing debt. The country has a 24 percent unemployment rate.

While the Gold and Silver precious metals group is being thrashed, their counterparts, Platinum and Palladium are looking strong. The biggest producer of these metals i.e. Russia is having tensions with Ukraine while the second biggest producer i.e. South Africa has union problem. Due to these issues, I feel Platinum will look forward to extend its lead over these metals.

My trading range for the upcoming week for Gold in international prices is around $1270 to $1330 and for Silver $19.30 to $20.20. While in Indian rupees, Gold prices will range from INR 27900 to INR 29200 and for Silver the trading range will be INR 41,500 to 44,500.




The primary purpose of this article by Mr. Prithviraj Kothari is to educate the masses of the current happenings in the Bullion world.

- Previous article- "OUR LOVE FOR GOLD"