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Showing posts with label RSBL. Show all posts
Showing posts with label RSBL. Show all posts

Monday, 13 February 2017

GOLD STABILISES AMIDST UNCERTAINTIES

While when gold was just about to continue to maintain its 3 month high last week, there was a sudden pull back and gold prices moved lower by the end of the week.

Gold steadied on Friday, but remained below the week's three-month top as the U.S. dollar and Treasury yields came off their highs after the currency initially jumped on U.S. President Donald Trump's promise of a major tax announcement.


Gold was being pushed and pulled amidst various factors that played key roles in influencing gold prices-

Interest Rate - Gold slid on Thursday from a three-month high in the previous session after strong U.S. economic data pointed to a robust economy, increasing the possibility that the Federal Reserve will raise U.S. interest rates.
U.S. economic data has also strengthened talk that the Federal Reserve would press ahead with U.S. interest rate hikes sooner rather than later.
Gold is highly sensitive to rising U.S. interest rates which increases the opportunity cost of holding non-yielding bullion while boosting the dollar  in which it is priced.

Dollar and Data - U.S. economic data also underpinned the dollar. Initial jobless claims unexpectedly dropped last week to a nearly 43-year low, while inventories at wholesalers surged in December for a second straight month. U.S. import prices rose more than expected in January.
The data showing rising U.S. wholesale inventories and an unexpectedly low number of Americans filing for unemployment benefits further pushed up the dollar and U.S. bond yields.                        
A stronger dollar makes gold more expensive for holders of other currencies, while higher yields increase the opportunity cost of holding non-yielding bullion. Higher interest rates would lift yields further.
           
Tax Announcement - Donald Trump plans to announce the most ambitious tax reform plan since the Reagan era in the next few weeks, the White House said.
On Thursday, sending stock prices and the dollar higher on hopes leading to a cut in corporate tax rates.

French Elections - Investors are concerned about the strong showing in the French presidential race of far-right candidate Marine Le Pen, who has promised to take France out of the euro zone and to hold a referendum on European Union membership.

Gold held near 3-month highs on Thursday as political risks from elections in Europe and worries over U.S. President Donald Trump's policies buoyed safe haven demand for the bullion.

While gold was stabilised by Friday. It was still amongst the favourites for investors. Many of them are being bullish for gold – Reasons being :

  • Controversy over U.S. President Donald Trump's temporary travel ban on people from seven Muslim-majority countries has recently boosted gold as a safe-haven asset.
  • Further geo-political uncertainties, increasing hostilities in the Ukraine, Greek bailouts, French elections, Iran-U.S. sabre-rattling have supported gold prices and drawn interest from investors who seek support in safe haven assets.
  • Investors' bullish stance on gold is reinforced by an increase in net longs by speculators and a rise in holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund. (SPDR holdings rose 0.68 percent to 832.58 tonnes on Wednesday from Tuesday, rising for a sixth straight session.)

Increasing uncertainties has increased the demand for gold as a hedge. Amidst all this, gold prices are expected to rise till Mid Feb. Once January CPI data is released, it will give an idea about the possibility of a rate hike in March which will then be a deciding factor in the movement of gold prices.

Friday, 3 February 2017

Budget views 2017



From the previous budget to this year’s- Gold witnessed some key events in the domestic market.
They varied from politics to economic to geopolitical. Namely-

Demonetisation
Prime Minister Narendra  Modi made the surprise announcement on 8th November 2016 that the 500 and 1000 Rupees are just “worthless piece of paper”. The 500 and 1000 Rupees notes have been banned to fight back money and money-laundering. The new 2000 and 500 Rupees notes were released on 8th November 2016. The aftermath of demonetization, banks and ATM across the country faced severe cash shortages.

Goods and service bills passed
Goods and Services Tax bill were passed on 8 August 2016. GST is a proposed system of indirect taxation in India merging most of, the existing taxes into a single system of taxation. It would be a comprehensive indirect tax on the manufacture, sale and consumption of goods and services throughout India, to replace taxes levied by the state and central governments.

Surgical Strike Against Pakistan
The Indian said that it had conducted “Surgical Strikes against suspected militants in Pakistani-administered Kashmir on 29 September 2016. Lt Gen Ranbir Singh (DGMO) said that it had received “very credible and specific information” about “terrorist teams” who were preparing to “carry out infiltration and conduct terrorist strikes inside Jammu and Kashmir and in various metros in other states”. The Indian action was meant to pre-empt their infiltration.

But of the ones mentioned above gold was majorly affected in the year end by the announcement of demonetisation scheme.

Gold has been a beneficiary and even a victim of demonetisation. On a net basis, this demonetisation exercise as of now has been neutral for gold. As the demonetisation alarm bells rang, the rush to buy gold was almost immediate. As media reports suggest and also confirmed by gold import numbers, a lot of gold was sold on the night of November 8, as many rushed to buy gold with old notes. Post that, as the cash crunch hit the economy, there was a significant decline in discretionary spending including gold.

In many of our pre budget expectations over the past few years, we have always proposed to make the gold industry more organised. Fortunately, the demonetisation scheme, launching of a gold scheme and making PAN number compulsory for purchases of gold jewellery worth more than Rs 2 lakh shows the seriousness of government in making the making gold a commodity and thus channelizing it into a more organised way.These are signs of positive policy

After a neutral financial year for gold industry in India, all eyes were on the Finance Minister for the budget that was presented today- Feb 1st. This date marks the change in previous customary budget schedules which usually took place at around the end of February, usually February 28. The gold industry was hoping for a change from last few years of high import duties to a more reduced levy.

The industry was expecting a reduction in duty not onlyfor the interest of the dealers but also for the good of the common man.

However, there was no such announcement and duties have been unchanged. The budget is neutral for the gold industry and overall positive. On a scale of 1 to 10 I would rate this budget as 6.5.

Wednesday, 1 February 2017

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.

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.


Saturday, 13 August 2016

Indian Gold Bullion Market- Issues, Challenges, Opportunities and the Way Forward: RSBL

                                                    - Mr. Prithviraj Kothari, MD RSBL



Do have a look at the video to know more on:
    Indian Gold Bullion Market- Issues, Challenges, Opportunities and the Way Forward


                                              https://youtu.be/EjkHGg0NJR4 



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You may follow me on:
The primary purpose of this article by Mr. Prithviraj Kothari is to educate the masses of the current happenings in the Bullion world.
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Indian Gold Bullion Market- Issues, Challenges, Opportunities and the Way Forward: RSBL

                                                    - Mr. Prithviraj Kothari, MD RSBL





Do have a look at the video to know more on:
    Indian Gold Bullion Market- Issues, Challenges, Opportunities and the Way Forward

video

                                              https://youtu.be/EjkHGg0NJR4 

Thank You!
You may follow me on:
The primary purpose of this article by Mr. Prithviraj Kothari is to educate the masses of the current happenings in the Bullion world.
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Monday, 1 August 2016

Gold and Silver prices on RISE: RSBL

                                                                                      - Mr. Prithviraj Kothari, MD RSBL




Precious metals price rise is eminent and it ended the week on a positive note post poor US data released. The negative data sent the dollar tumbling, stimulating a good recovery for the yellow metal and its white counterparts.

Data released from the US was as follows:
  • GDP data out of the U.S. disappointed on Friday, growing at a seasonally and inflation adjusted +1.2% during Q2 (exp: +2.5%) as business inventories contracted for the first time since Q3 2011
  • The University of Michigan’s consumer sentiment index dropped to 90.0 in July (exp: 90.2) from 93.5 in June as both current and future conditions declined.
  • The poor data countered the Fed’s statement that the US economy is stable and the near-term outlook is positive. Even though the unemployment rate is around five percent, the policy-board has been ineffective at spurring inflation or consistent wage growth. All eyes were on this meeting as something crucial was expected to happen regarding the interest rate hike. But negative data has postponed this hike and this gave gold the push. 
Apart from the US there was news that came in from other economies which affected the gold price: 

U.S Dollar:
Major downturn in the dollar created by the release of second quarter US GDP where it plummeted to 95.38 around the lowest mark since mid-June, before staging a modest uptick to 95.60.

Japan:
Host of new data releases and a Bank of Japan decision to inject further stimulus, markets were directionless this week with volatility and volumes continuing to drift lower. The Bank of Japan (BoJ) decided to adopt a minor adjustment to the existing monetary policy by increasing its purchases of exchange-traded stock funds to 6 trillion yen and expanded its dollar lending programme to $24 billion but kept its policy rate unchanged at -0.1 percent while maintaining the pace of government bond purchases.

The BOJ certainly doubled purchases of exchange-traded funds (ETFs) and said it will “conduct a thorough assessment of the effects of negative interest rates and its massive asset-buying program in September.”

The bank was considering a $265 billion package, part of which would target low-income citizens in another attempt to boost inflation and weak wage growth.

This can be understood as- either the central bank may feel that Japan’s economic growth needs very, very extensive stimulation and they have yet to formulate an appropriate plan or it can be interested that they want to see how the chips fall in eight weeks and move cautiously from there.

India:
Coming to the domestic markets- India being one of the largest consumers of gold, but currently the demand for gold isn’t intense. Frankly speaking, very few people want to invest in gold at this price. Buyers, it seems, feel that the current price is not sustainable and hence, they wait for a correction. Gold price in India is governed by two major factors: global economic conditions and the movement of rupee against the dollar. Both factors have contributed to the current price rise. While global economic conditions continue to pose a greater risk by the day following fluctuating recovery trend in the United States, Britain’s exit from the European Union (BREXIT) and other geopolitical tensions. On the other hand, Indian rupee has depreciated against the greenback despite reports of good inflow of dollars.

Since BREXIT, spot gold price jumped rapidly but, stayed elevated. Also, rainy season is considered as a lean period for gold purchase due to the lack of festivals, weddings or any other occasions during this season. Also, consumers have faced two subsequent years of deficient monsoon rainfalls. Although, the current year has seen normal rainfalls yet its distribution continues to remain uneven. Also, the crucial rainfall month – August – is yet to come. So, let’s keep our fingers crossed for the Kharif sowing and harvesting this year. In case of normal monsoon and its even distribution, Kharif crop would bring some cheers for farmers with higher output which would translate proportionate increase in gold demand.

In India, therefore, standard gold is available at Rs. 31,300 per 10 grams approx. Gold price may touch $1400 in near future in the international markets which will translate in rupee term at Rs. 32,500 per 10 grams. While the uptrend continues there could be some profit booking.

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

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Monday, 25 July 2016

Consolidation phase for Gold and Silver Prices: RSBL

                                                                           - Mr. Prithviraj Kothari, MD RSBL


BREXIT, FED, Dollar and many other key influential factors have proved to be beneficial for Gold and Silver prices in 2016. Last week too we saw many such factors influencing bullion prices but in the downward side. Let’s take a close look on the key highlights:

  • The S&P (US Stock exchange) posted a fresh all-time closing high and the major U.S. stock averages 2,163.24 locked in a fourth successive winning week following the Brexit vote.
  • At the weekends G20 summit in China, the world's biggest economies noted they will work to support global growth and share the benefits of trade, in a meeting dominated by the impact of Britain's exit from Europe and fears of rising protectionism. Philip Hammond, Britain's new finance minister, said the uncertainty about Brexit would begin to abate once Britain laid out a vision for a future relationship with Europe, which could become clearer later this year.
  • On Thursday, 21st July , in Frankfurt, the European Central Bank (ECB) and President Mario Draghi decided to leave rates unchanged after the Brexit-induced market shockwaves have faded somewhat. Draghi and his fellow central bankers gave no indication that the current 1.7 trillion-euro quantitative-easing plan needed to be increased following the UK vote to leave the single market. The council doesn’t meet again till September, but investors aren’t anticipating any adjustment to the bond-buying programme in the near-term thus leaving the door open to more policy stimulus, highlighting "great" uncertainty and abundant risks to the economic outlook.
Though bullion has benefited from the loose policy decisions coming in from central banks of Europe and Japan, but on the other side the dollar has gained on strong U.S. data, boosting bets the Fed will raise U.S. rates by year-end.

Globally, gold nearly fell to $1,312 and silver to USD 19.46. Traders attributed the fall in gold prices to a weak global trend where the precious metal headed for its first back-to-back weekly decline since May as gains in equities and the dollar ate into demand for the metal as a storage value. Few other important indicators that contributed to the downfall:

  • Data released from the U.S. showed that U.S home resale’s hit their highest in nearly 9 and a half years in June as low interest rates lured first-time buyers into the market and the number of Americans filing for unemployment benefits fell last week, underscoring the economy's strength.     
  • Adding to the down trend in prices were the figures released by SPDR. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.22 percent to 963.14 tonnes on Thursday.

I do feel that the Price action will likely be skewed to the downside and expect to test the post-Brexit low around USD $1,305 and below this USD $1,300 should global equities continue their upward trajectory.

The Jackson Hole Symposium Aug. 25-27, where Yellen is scheduled to speak is where we will most likely get more relevant information about coming Fed policy and the next direction.
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The primary purpose of this article by Mr. Prithviraj Kothari is to educate the masses of the current happenings in the Bullion world.

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Wednesday, 20 July 2016

Gold prices to go up: RSBL

                                                                 - Mr. Prithviraj Kothari, MD RSBL




While financial uncertainties were influencing gold prices, we have lately seen geo political uncertainties giving the yellow metal's safe haven appeal a further support if not permanent a temporary one.  The failed military coup in Turkey did manage to shake the markets.

Spot gold prices turned higher, reversing earlier losses in late trade on Friday in New York after Turkish Prime Minister Binali Yildirim said a group within the country's military has attempted to overthrow the government. For several hours overnight on Friday violence shook Turkey's two main cities, as the armed faction which tried to seize power blocked a bridge in Istanbul and strafed the headquarters of Turkish intelligence and parliament in Ankara. But the coup attempt crumbled as Erdogan rushed back to Istanbul from a Mediterranean holiday and urged people to take to the streets to support his government against plotters he accused of trying to kill him. The government declared the situation under control, saying 2,839 people had been rounded up, from foot soldiers to senior officers, including those who formed "the backbone" of the rebellion.

Earlier on Thursday, spot gold price crashed down to a two-week low of $1,320.45 after the Bank of England’s (BOE), contrary to expectations, kept interest rates unchanged in its Thursday meeting. In a somewhat surprising move, the Bank of England (BoE) decided to keep rates steady despite fear over the health of the UK economy following the Brexit vote.

Holdings in Global Gold ETF’s rose on Friday but lost about 10 tons in total over the week to 2002 tons, which was the biggest decline since March/April this year.

Gold continues to trade range bound between USD $1,320 - $1,340, however participants are still looking to play on the long side and we are likely to see moves lower well supported.

I largely see the spot gold price supported at the $1,300 level due to a post-Brexit global economic uncertainty and possibly lower US interest rates and given this critical situation at Turkey, precious metals prices are expected to move higher as they have always been influenced by geopolitical uncertainties.

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Monday, 11 July 2016

Bullish direction of Gold and Silver prices: RSBL

                                                                       - Mr. Prithviraj Kothari, MD RSBL


Gold has once again proved its worth and claims to be the best performing asset of 2016, emerging from a three-year bear market. The yellow metal has gained almost 26% since 1 January, the best half-year performance since 1980, Bloomberg data showed. Silver, following gold, rose 30% in the first six months, leaving other assets such as the US and German bonds, Japanese yen and the US dollar far behind.

The flight to safe haven assets triggered by global political and economic uncertainty has made bullion the year’s most preferred investment, with gold and silver beating other asset classes by a mile.

The past four sessions following the Brexit vote saw gold prices spike about 6%, while silver advanced about 5%. Gold has definitely benefited from the Brexit incident, but there have been reasons more than one that this yellow metal has once again has got into limelight.

Global economic uncertainty, slower growth in China, accommodative monetary policy of the major central banks and weakness in dollar earlier this year had prompted investments into safe haven assets like gold and silver.

Global Uncertainty:
The market continues to benefit from safe-haven investment flows in the wake of the UK vote to exit the EU, which has led to heightened uncertainty over global economic prospects and increased risk aversion.

Dollar:
Strength in the US dollar was the major contributor to weakness in gold and commodity prices for the past few years. However, increasing uncertainty about economic and political developments, low-to-negative interest rate environment as well as doubts over global economic recovery post the collapse of Lehman Brothers in 2008 have led to demand for precious metals, analysts said.

China:
Economic slowdown of the Chinese economy has raised questions over the global growth and development. These concerns have put an upward pressure on gold. 

Monetary Policy:
The current economic backdrop, along with fading prospects of an interest rate hike by the US Fed at least till December validates further march of bullion on the upwards trajectory over medium-term.

Contradicting these prospects, the Jobs report released pulled gold prices down but not significantly. The report stated that in June, 287,000 Americans entered the labour market, far exceeding expectations of 174,000 while average hourly earnings period ticked up 0.1 percent, below the forecast 0.2 percent.

Still, the unemployment rate rose to 4.9 percent from 4.8 percent after the May figure was revised down to 11,000 jobs from what was already a multi-year low of 38,000. The June employment figure had gained greater significance following the disappointing May report, which suggested the US recovery was beginning to slow after seven years of expansion.

It was a session marked by extreme volatility on Friday with gold experiencing a $35 range and silver $1.00, with NFP's driving price action. The prices send a solid signal for the Gold price to move beyond $1400 in short to medium term.

Further supporting gold was the Chinese gold reserves figures. It stated that China's gold reserves stood at 58.62 million fine troy ounces at the end of June, up from 58.14 million at the end of May, the central bank said on Thursday. Such a stock up already appears to be in motion for the gold stocks.

Given these supporting factors for safe haven metals, investors have engaged themselves into purchases of gold and silver and this is further giving and upward thrust to precious metals.

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

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Tuesday, 5 July 2016

Sharp increase in Silver prices: RSBL



                                                       -  Mr. Prithviraj Kothari, MD RSBL


On announcement of BREXIT, the markets panicked and this was reflected in the movements of gold prices. Initially gold prices soared and were at fresh highs of past few years. Once markets settled, gold did see some correction but then there were signs of a modest pick-up in risk appetite leading to further rise in gold prices. Once again gold was considered as a saviour in times of uncertainties and it regained its safe haven appeal with current prices at US$1,350.

But what surprised the market were the movement in prices of the white metal: Silver. 

Silver jumped to the highest level since September 2014 as investors speculated central banks will need to continue support the global economy in the wake of Britain’s vote to quit the European Union. Governor Mark Carney said on Thursday the Bank of England could cut interest rates within months as it tries to shield an unstable UK economy. 

The price of silver climbed 26% through the first four months of 2016. That not only beat gold prices by 7.5%, but it also bettered the Dow Jones Industrial Average and S&P 500 by 24% and 25%, respectively. Silver prices had surged to a high of $20.46 (a near two year high) and currently trading at $19.80. 

Silver Price rise_RSBL SPOT Terminal

Apart from BREXIT, the Caixiin Chinese manufacturing purchasing managers index (PMI) released on Friday continued to raise concerns about China’s weaker-than-expected economic recovery with the Chinese manufacturing PMI for June read 48.6, which was below forecast of 49.1 and May’s number of 49.2. It was the index’s third monthly decline in a row and marked the steepest deterioration in manufacturing conditions since February.

Not only the above news item, but Silver’s bullish stance can be supported by the below given key points:
  • Lower Gold/Silver ratio. The current ratio stands around 75 much lower than the peak of around 84 in March. Over the same time the Silver prices have gone up by nearly 11 off percent.
  • Prospects for further US interest-rate increases have been wound back since the BREXIT vote. Commodity prices in US usually benefit from lower interest rates.
  • Silver plays a key role in Photovoltaic (PV) cells that are being used in Solar panels. World economies around the globe are jumping on clean energy bandwagon to reduce the pollution levels and solar energy plays an important role. With an avid increase in solar energy contribution, Silver demand will increase exponentially.
  • India is one of the key importers of Silver over the past few years and the demand has only been increasing in the wake of lower prices till Jan, 2016.
 

Silver prices still have room for further movement upwards and the current panic and fear in the markets could raise these prices further. Gold may have a room to correct till $1,280 – 1,300 in short term but the political and unknown economic conditions created by BREXIT, could raise prices further for precious metals.

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


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