News packed week for gold

 Gold cracked towards the low of November, where postmodern vaccine, it was sold out to $1767. Now the situation is slightly different since U.S Job situation has been improving gradually. New stimulus package in the US will help sustain jobs and economic growth. That’s why gold slipped and we need to address caution says most of the top gold dealers in India. But before that, markets were also waiting for the key jobs numbers. 

The Friday US Jobs report was pretty worrisome for the policy maker. The payrolls for Jan 21 was 49K against expectations of 85K and the unemployment rate shot up to 6.3 % as the low profile job additions were high. Still the Nov and Dec 2020 negative adjustment was not showing a healthy sign on job situation. Its impact was seen largely on USD index which tumbled from 91.65 to 90.9. 

Last Friday, the US employment report showed a smaller than expected increase in jobs across the country, raising concerns of a slowdown in the labor market that could potentially impede recovery in the world’s largest economy following the coronavirus crisis. 

The disappointing figure sent the US dollar lower after it had touched a two-month high over the past few sessions, helping boost gold prices.

Spot gold rose 0.1% to $1,813.99 per ounce and U.S. gold futures gained 0.2% to $1,816.50 during Monday’s trading session. 

The dollar fell from an over two-month peak on Friday after a U.S. jobs report indicated a slow recovery from the impacts of the COVID-19 pandemic. A weaker dollar makes gold cheaper for holders of other currencies believes analysts from RSBL.

The employment report on Friday showed job losses in manufacturing and construction, two sectors which have been propping up the economy.

U.S. President Joe Biden and his Democratic allies in Congress forged ahead with their $1.9 trillion COVID-19 relief package on Friday.

Early on Monday, gold prices are on the rise on the back of a disappointing employment report which brought back worries about the pace of economic recovery in the US and weakened the US dollar. 

The weaker jobs report also supported the safe haven appeal of gold as it further highlighted the weakness caused to the US economy by the coronavirus pandemic, which remains ongoing despite the rollout of vaccines. Key sectors of the economy, manufacturing and construction, suffered the most severe job losses.

Prices were also climbing higher on the back of improvement in demand for physical gold among consumers in China and India. The upcoming Lunar New Year holiday in China has spurred sales of gold while Indian retail consumers spent more on gold after its domestic rates slid lower.

Another significant factor that triggered gold was Bitcoin. The BC bulls got an electric jolt to the upside when it was just announced that Tesla has invested $1.5 billion in Bitcoin and that the electric vehicle maker will incorporate Bitcoin into its operation. Gold prices also pushed higher about the same time the Tesla news came out.

This week can show significant movement in gold as Wednesday is a packed day, as Fed Chair Powell will also be speaking about the labor market at a webinar hosted by the Economic Club of New York. Later that evening, the U.S. Federal Budget Balance will be published, while on Thursday, initial jobless claims numbers will be released.

Gold prices are the cusp of a breakout or stalling at the low $1,800s this week, depending on U.S. inflation data and a speech by Federal Reserve Chair Jay Powell that could set the tone for longs trying to find their feet after last week’s shake-up in the yellow metal.

Any of these data releases, along with Powell’s speech, could determine the direction and velocity for gold this week

Union Budget 2021- its a 10 on 10

Presenting the Union Budget 2021-22, Finance Minister Nirmala Sitharaman announced that the custom duty on gold and silver will be rationalised to bring them closer to previous levels.

Gold and silver presently attract a basic customs duty of 12.5 per cent. The custom duty on gold has been reduced from 12.5 to 7.5% which has pleasantly been beyond expectations. 

RSBL Gold dore bars and silver dore bars will attract customs duty of 6.9 and 6.1 per cent, respectively, as opposed to the existing rates of 11.85 per cent and 11 per cent respectively. These items will also attract Agriculture Infrastructure and Development Cess at the rate of 2.5 per cent.

While gold and silver will attract agriculture infrastructure and development cess at the rate of 2.5 per cent and social welfare surcharge of 10 per cent. Including the GST, the total tax on gold and silver would be around 13.75 per cent, which was at 15.50 per cent, earlier

Since the duty was raised from 10 per cent in July 2019, prices of precious metals have risen sharply. To bring it closer to previous levels, custom duty on gold and silver has been rationalised. 

As far as post budget reactions are concerned, gold prices plunged over Rs 2,100 on Monday after the Union Finance Minister Nirmala Sitharaman announced the changes in customs duty rate for precious metals. 

The reduction in duty has been warmly welcomed by the entire jewellery and bullion industry as it will result in an increase in physical demand for the yellow metal (which has been dampened due to the pandemic) and at the same time it will compress down illegal gold importing channels.

Further more , income tax assessment has been reduced from 6 years to three years. This will reduce the burden on the tax payers.

Analysts from RiddiSiddhi Bullions Limited feel that the government has given its best and introduced many good schemes, which will work in the favour of the Indian economy. Lot of money has been pumped in to the economy for revival and sustainability. We will witness a significant growth and developments in the form of infrastructure, jobs, industrial development.etc

The much awaited budget during the pandemic has lived up to the expectations as the government has tried from all sides to push economic growth and development.

For people at RSBL the budget is a sure shot 10/10 as players across the sectors has been quite satisfied with the new policies and its spill effect was seen on the equities markets as it rose high