RSBL Gold Silver Bars/Coins

Thursday, 7 February 2013


Precious metals and to be precise - Gold, has been trading in a tight range since the last couple of weeks, underpinned by a series of US economic releases and renewed optimism over global growth that has reduced investor appetite for the yellow metal. The outbreak of positive reports has lifted the US equities as well. Optimistic global economic outlook usually diminishes the bullion’s safe haven appeal and makes it cheaper.

In the near future gold is expected to range between $1651- 1700 and any of the side breakouts would create a new range for the yellow metal. Silver too is expected to range within a mild negative bias. Close above the reaction high crossing at 32.485 are needed to renew the rally off January's low. Close below last Monday's low crossing at 30.745 is the next downside target.

Gold Prices floated above $1670 per once Wednesday morning. Gold traded in a tight range of $ 1675 and weakened to $1670 area. This was due to the prevailing uncertainty in the Euro zone. However, I do not expect a very high or very low range for gold thus remaining neutral and would advise to look to trade according to the direction of the market. Gold price remains stuck but technically, it is setup to rise but bouts of profit taking capped upside movement. 

Moreover Gold has lost its shine as investors are moving to other conventional assets like equity that have recently shown strong performances. Safe-haven assets have performed fairly poorly as expectations of growth have improved. A lot of those debt-related risks have for the time being faded into the background. Safe haven assets have disappointed investors and traders and have not met the expectations of growth. In that kind of environment, there is no significant motivation for gold prices to rise on the basis of investment demand.

Meanwhile platinum and palladium held near 17 month highs due to rising industrial demand that raised confidence in growth outlook and also concerns over the supply outlook from South Africa and Russia. We believe part of the latest rally in platinum (and palladium) was spurred by the Swiss customs data which indicated that in December, Switzerland remained a net exporter of platinum (456,973 oz) for the fourth consecutive month and also a net exporter of palladium (432,650 oz)
Technically, a breakout on gold prices may come sooner rather than later. A break higher to $1685 gives a bullish signal to retest previous high of $ 1697. Should that fail, the bears will be in total control to push it back down to $ 1625. The MACD is rolling flat but stochastic showing more bullish attitude. It is a matter of time before prices breakout from this potentially bullish ensign.
Gold support is at $1,663 and $1,656. Resistance is $1,682 and $1,693. Silver support is at $31.50 and $31.32, resistance is at $31.99 and $32.30.
Platinum support is at $1,712 and $1,686. Resistance is at $1,738 and $1,760. Palladium support is at $756 and resistance at $777.

Tuesday, 5 February 2013


The prices of precious metals showed a downward trend on Thursday, though they were under the green range on Wednesday. On Thursday, the price of gold decreased by 1.15% to $1,660.6; Silver price also fell by 2.54% to $31.34. 

The main reason behind this was the release of China’s manufacturing PMI report. It stated that China's PMI inched down to 50.4, which means that the development and expansion in China has caught a slow pace, which in turn means that the demand for gold from China will reduce.

However, most traders and investors were more interested in the nonfarm pay roll report that was released on Friday. Gold and silver prices went up after the release of US payroll data.  Gold, silver and equities were all moving on a higher note on Friday.

The U.S. employment rose again by lower than many had anticipated – according to ADP the non-farm payroll rose by 192k – during January: according to the latest U.S. employment report, which was published on February 1st by the Bureau of Labor Statistics the number of non-farm employees rose by 157,000. The main sectors that grew during January were in Retail trade, construction, health care, and wholesale trade.

 One likely reason that affected Gold and Silver is that the Federal Reserve is unlikely to make any changes to its very accommodative monetary policy with that news. The Fed has set actual goals for the unemployment rate – 6.5 percent – and quantitative easing is expected to continue until the unemployment rate hits that figure. 

Other data showing improved US factory activity and better consumer confidence data also set the prices upwards. Spot gold was up 0.6 per cent a $1672.61 an ounce retreating from an earlier high of 1681.70.

The metals went low in a sell off position after St. Louis Fed President James Bullard said that the US Economy will show a better performance this year, which will put the central bank in a position to slow or halt its massive bond buying.

As per the MCX india site, almost 4.7 tons of Gold is already in their warehouse. This is a huge amount of Gold that is sitting idle with fewer takers. Technically, for the past 4 weeks the metal has been stuck within a $1643 to $1695 trading range. These long periods of sideways consolidation typically result in a break in the next direction of the trend. We are starting to think the market is building a base considering that 3 of the past 4 weeks have been up weeks. A close back above $1695 would bring in fresh buying looking for a return to October highs.

Going forward the factors that will affect the Gold Price are:

  1. Easing Eurozone stress and better financial conditions 
  2. Growth momentum & Stimulus program in US,
  3. Indian Government policies 
  4. Strengthening of Indian rupee against Dollar