HAS THE BULL PERIOD FOR GOLD ENDED?

                      - Mr. Prithviraj Kothari (MD, RSBL:RiddiSiddhi Bullions Ltd.)

This entire week gold was dancing to the tunes of the Fed's stimulus plan.

On Wednesday, June 19, Federal Reserve Chairman Ben S. Bernanke stated that the central bank may start curbing stimulus. He further said that the central bank may start reducing the $85 billion in monthly debt buying in 2013 and end the program in 2014. Only if US economic conditions this step would be taken. Once this statement was out, gold plunged down. The market was taken aback by shock that triggered moves in a number of markets Thursday, including weaker equities, a stronger dollar, higher Treasury yields and gold saw its lowest level since 2011. Silver was the hardest hit, which fell from 21.33 to as low as 19.39. 

However, all this comes on an assumption that the U.S. economy continues to improve.

An improvement in the US economy means that- 

Ø  The Q4 GDP in the US must reach 2.3-2.6 percent

Ø  The unemployment rate must drop below 7.3- 7.2 from the current 7.6 percent

Ø  The inflation rate must be well below 2 per cent.

If this happens then gold will no more enjoy the "safe haven metal" status that it currently has.

Investors have already started losing faith in the metal as gold heads for its first annual drop since 2000. Some even say this statement from the Fed clearly gives a signal that the bull period for gold has ended.

The main reason that gold touched its life time high in 2011 was the launch of QE and if this stimulus plan is curbed then gold will plunge terribly.

The premium at the Shanghai Exchange for physical gained 10 USD to trade as high as 30 USD over the international price. Trading volume at the time of writing was 22.2 tons on the two physical contracts, far away from the 57.6 tons seen on the record day in April of this year. One reason for the lower volume could be that the physical market is still tight as refineries have back logs. Furthermore import quotas might have been reached by some participants and last but not least the tight cash liquidity among Chinese banks these days.  

Apart from the current statement released, traders and investors await the reports that are due this week which will justify the curtailment of the stimulus plans.

The reports to be watched for are -

Ø  Durable goods Report

Ø  Consumer Confidence report

Ø  New Home Sales report

Ø  Gross Domestic Product

Ø  Weekly jobless claims and personal income and spending

Moreover, Treasury yields and the amount of bargain hunting that emerges after this week’s sell-off will also be closely watched by gold traders next week.

While in the currency market, we saw depreciation of the rupee, with rupee touching an all time low of Rs. 60 against the dollar.

Weakness in gold initially persisted into Friday’s overnight session, but Asia-Pacific traders said Chinese buying helped the market steady. By Friday Mid night gold was up around 2 dollars reaching 1292$. 

Though gold has shown nominal signs of recovery, the basket of suspense will open next week for this yellow metal.

Gold support is at is at $1,290 and $1,232. Resistance is at $1,300 and $1,350. Silver support is at $19.26 and $18.53, resistance is at $21.30 and $22.60.

"The primary purpose of this blog by Prithviraj Kothari - MD, RSBL(RiddiSiddhi Bullions Ltd.) is to educate the masses of the current happenings in the Bullion world."

~ Previous Blog:
 "Searching For The Bull In The 'BULL'ION" :
 http://riddisiddhibullionsltd.blogspot.in/2013/06/searching-for-bull-in-bullion.html

SEARCHING FOR THE BULL IN THE "BULL"ION

   - Mr. Prithviraj Kothari (MD, RSBL:RiddiSiddhi Bullions Ltd.)

                                               

Till the last day of the week everything was under the green light for gold. It reached a 1 week high above $1419 per ounce on Thursday. Research reveals that rise was seen due to the expectations by traders just ahead of the US data release on Friday.

It was being anticipated that US would not be adding much jobs which in turn would not compel the FED to discontinue its stimulus measures. Hence Gold prices would rise even further.

As economic condition in US and the global economy would worsen and central banks would print more money to spur growth, analysts say that gold will shoot up to new highs and send shocking waves the way it did when it crashed in April.

Central banks around the world are looking at gold bullion as an alternative to the currencies they hold in their reserves. It is well documented in these pages how major central banks like the ones from Russia and Turkey continue to buy gold bullion. This too was a reason to support the rising gold prices. But what happened on Thursday came as a complete shock to the bullion market.

The US reports showed signs of growth and recovery. The country added 1,75,000 jobs in May compared to just 1,49,000 in April. The Fed stimulus plan is based manly on the basis of the Labour report.  The employment number is better than expected and it suggests that the Fed bond buying may end in some time.

The addition of jobs reduced hopes that the Fed will continue with its stimulus plan and this reduced gold’s appeal as an inflation hedge tool Gold fell back through $1400 Friday as European stock markets erased earlier losses. GOLD and silver prices whipped sharply Friday lunchtime in London, as there was a slight rise in jobless rate to 7.6 per cent 

Gold fell around 2 per cent on Friday, thus making it the biggest one day drop in three weeks. During the trading day on Friday, Spot gold was down 2.1 per cent at 1383.96 an ounce, having hit a low of 1377.39 during the same day

Moreover, SPDR gold trust ETF holdings continue to tumble: the ETF’s amount of gold held declined by 5.8% during May and by 25% since the beginning of 2013. If gold holdings will continue to dwindle, they could indicate the demand for gold as an investment continues to fall. 

While in India, gold imports reached an all time high. For the first time ever, 135-160 tonnes of gold were imported during the month of May. The highest in any month till date. This compelled the government to raise the import duty yet again to 8 per cent so as to curb imports.

As per my view, the government’s decision is good. Imports are at an all time high. Though this decision of the government will curb imports but it will not have an effect on the demand. In a population of 120 crore where gold is the most preferred investment mode, the government should undertake other policies to curb imports, there is 25000 tonnes of house hold gold lying idle in Indian homes. This gold should be got into the markets through gold deposit and gold lending and borrowing schemes. 

ETF loans are also a good option. But in spite of constant mentioning, these schemes are consuming time for execution due to complications.

Gold is expected to move in the range of Rs. 26500 to Rs. 28500 per 10g in the coming week.

"The primary purpose of this blog by Prithviraj Kothari - MD, RSBL(RiddiSiddhi Bullions Ltd.) is to educate the masses of the current happenings in the Bullion world."

-Previous Blog:
"Comments On Gold Duty Hike Of RBI":
 http://riddisiddhibullionsltd.blogspot.in/2013/06/gold-duty-hike.html

Comments on Gold Duty Hike of RBI!

          - Mr. Prithviraj Kothari (MD, RSBL:RiddiSiddhi Bullions Ltd.)

                

          

Finance Minister is back with a new change in Gold policy, announcing another attempt to curb Gold imports by increasing the import duty from 6% to 8% with immediate effect, will have a loud impact on the Bullion sector. Increase of 2% at current rate of $1400 per ounce is 28 USD per ounce. To be clear, with this duty hike a difference of 9.24 percent between the international and domestic price of the yellow metal is evident.

The headline should however have had a negative psychological impact and it is surprising that Gold wasn’t sold harder yesterday, which might again point to the fact that traders are now cautious on the next set of US data.

Taxes included in the price is 8.24% Customs Duty + taxes(Educational Cess etc) + 1% VAT = 9.24% while  1% TCS is applicable on Cash Sale, will incentivize a rise in illegal channels and malicious activities with respect to importing gold and related products like jewellery etc., in the country. To give you a snapshot, 1 kilo of smuggled Gold into India, where the bar has a size smaller than a Samsung S4 (approx), would yield approx 4160 USD i.e. INR 2,37,000 (approx as per current rate of 1 USD = INR 57), or 3 times a yearly income per capita [GDP (nominal) - 2012 estimate  - Total $1.947 trillion (10th), Per capita - $1,592 (140th), Source: http://en.wikipedia.org/wiki/India]. Every Indian going on a holiday abroad might be tempted to carry some Gold back (in prescribed limits as per Government norms), as the tax saving could help paying part of the trip. While 1 kilo of Gold is not affordable to most of Indians, organized illegal channels could finance porters and collect the Gold at their return to the country.

In turn it will lead to an increase in unemployment among the skilled artisans of the country (around 1-2 million people depend on this sector to earn their livelihood) as well the businesses of local jewelers across the country. The government should harness the existing reserve of gold in our country rather than turning towards imports and implementing this alarming hike on customs duty. Also other opportunities for revenue generation, like increasing exports should be explored by the government of India. Hiking the duty on imports will in no way, curtail the absolute demand (can reduce it), as the precious metal has always been regarded as one of the best investment options for social security.


"The primary purpose of this blog by Prithviraj Kothari - MD, RSBL(RiddiSiddhi Bullions Ltd.) is to educate the masses of the current happenings in the Bullion world."

- Previous Blog:
"See Saw Yet Again" :
 http://riddisiddhibullionsltd.blogspot.in/2013/06/see-sawyet-again.html

SEE SAW.....YET AGAIN!

                - Mr. Prithviraj Kothari (MD, RSBL:RiddiSiddhi Bullions Ltd.)

There were mixed or rather confused sentiments in the precious metals market as we saw gold rising consecutively for 3 days till Thursday but again dropping almost 1.6 per cent on Friday (its biggest one day loss in two weeks)

The prices of precious metals changed direction and bounced back on Tuesday. Their recovery coincided with the decline in equity markets and the rally of leading risk related currencies such as Euro and Aussie dollar

The main reason for gold recovery till Thursday was the US Economic Data that was released. There was an unexpected Increase in the jobless claims and higher pending home sales too increased less than expected. Jobless claims rose by 10k to reach 354k during the previous week and the US GDP for the first quarter of 2013 expanded by 2.4 per cent - which disappointed many as it was slightly lower than the previous estimate. It gave signals that its recovery is still not too close. This boosted the prospects that The Federal Reserve will not pull back its monetary stimulus plan

Prolonged accommodative monetary policies favour gold as low interest rates encourage investors to put money into the non-interest-bearing assets. The little to no improvement in the U.S economy according to these reports may have contributed to the depreciation of the USD against leading currencies and the rally of precious metals

Gold was up 1.98%, thus trading at 1417.81 an ounce post the data release on Thursday. The yellow metal remains supported by weak US GDP numbers and positive Asian growth numbers.

However, Friday being the last day of the month we saw selling pressure in the markets.

A few data was released on Friday too. There was again optimism created in the market as regards the recovery of the US economy. Some stronger-than-expected U.S. economic data released Friday morning has boosted the U.S. dollar index and in turn put selling pressure into the gold market. US Data released on Friday showed low inflation and improving consumer confidence. This dampened investor interest, thus dropping bullion prices.

Bullions marked sharp losses for a second consecutive month as we has also witnessed the great gold crash in April

Moreover, there was no sell off seen in ETF's on Friday. Holdings in the SDPR Gold Trust remain unchanged at 1013.15 tonnes on Thursday, after rising for the first time in three weeks on Wednesday

As we are exiting May, volatility of precious metals is expected to rise as gold and silver contracts are expiring.

Gold support is at $1,390 and $1,373. Resistance is at $1,427 and $1,440. Silver support is at $22.20 and $21.80, resistance is at $23.10 and $23.54.


"The primary purpose of this blog by Prithviraj Kothari - MD, RSBL(RiddiSiddhi Bullions Ltd.) is to educate the masses of the current happenings in the Bullion world."

- Previous Blog-
"Fed's Policy Statement- Predictable I feel?" :
 http://riddisiddhibullionsltd.blogspot.in/2013/05/feds-policy-statements-predictable-i.html

FED'S POLICY STATMENTS – Predictable I feel?

-By Mr. Prithviraj Kothari, MD, RSBL (RiddiSiddhi Bullions Ltd.)

Why did the financial world react in this manic-depressive way to a statement that was bland and predictable? Why do investors keep gambling vast sums of money in speculations on changes in monetary policy when Bernanke has tried to make crystal clear that significant changes are unlikely, at least until the end of the year? I think no one would have any clue with respect to these questions.

As always the effect on Gold is felt in a big way. Gold fell for a third straight session on Thursday after U.S. Federal Reserve Chairman Ben Bernanke hinted at reducing an $85 billion bond-buying programme, which has increased the precious metal’s appeal as a hedge against inflation. While Bernanke said the central bank needs to see further progress in the U.S. economy before the Fed scales back monetary stimulus, he also added that a decision to adjust it could come in the “next few meetings” if the economy looked set to maintain momentum. Down nearly 20 percent this year, gold could come under more selling pressure as investors increasingly price in a stimulus cut ahead of the Fed’s next policy meeting on June 18-19.

But Gold markets did manage to regain some composure yesterday. We saw a steady climb towards the $1,400/oz level until the US market opened. Some profit-taking took the US market lower, although a recovery soon took the price to a relatively stable trading range, just above $1,390/oz. The stability continued during Asian trading, with the price remaining in a very tight band of around $1,390/oz to $1,395/oz.

As pointed out earlier, I do feel that more upside for gold is in the offing. Even taking a slowing of Fed quantitative easing into account, we still feel that the environment remains supportive of a higher gold price—global liquidity should continue to grow, although maybe at a slower pace, and real long-term interest rates across the globe look set to remain low for some time still. Nevertheless, I cannot discount the investor apathy towards the metal and acknowledge that it will take some doing to restore confidence. Consequently, while I do still foresee upside for gold, these gains will most likely be hard won. The first challenge will be to push strongly past the $1,400/oz hurdle.

Physical demand remains strong in the major Gold consuming countries, where China has seen a daily increase in physical trading volumes. How tight the physical market still is, is reflected in the premium of 50 USD still paid today in Shanghai over the international price. Premiums in India started to cool off, as the weaker Rupee drove local Gold prices up and some Gold has restarted to be imported into the country, however rather sluggishly. Top gold buyer India, which had seen gold imports jump 138 percent in April, is facing a slowdown as the peak wedding season comes to an end and its central bank imposes new rules to reduce a deficit. 

There is no doubt gold is still one of the attractive assets at present as economic uncertainty is not over across the developed world. Federal Reserve has created money, but that money has not been circulated into economy as banks are still tentative to flood the market with easy money. Economists are apprehensive that when this money will be circulated, inflation may trigger in a big way. But that theory will be tested when the actual event happens.

The Fed will probably want to see six months of strong employment and at least two quarters of 3 percent gross domestic product growth before it seriously considers tightening. In the meantime, big market reactions to comments from the Fed chairman, like those Wednesday, will mostly be reversed – expensively for those investors who replace analysis with wishful thinking.

In short, there are still reasons to buy gold; there are reasons to hold gold; there are reasons not to go aggressive in investment. So, my gold may remain in a range ($1325-1550/oz) till September (German Election may be the next trigger).

“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 -
  "Is gold losing its safe haven appeal" 
http://riddisiddhibullionsltd.blogspot.in/2013/05/is-gold-losing-its-safe-haven-appeal.html

RIDDISIDDHI BULLIONS LTD. FORAYS INTO DIAMOND JEWELLERY

Mumbai, 12th May 2013: Diamonds are said to be woman's best friend. And RSBL promises to strengthen this friendship even further.

We at RSBL, announce our foray into diamond jewellery uncer our promoed company- RSBL DIA Jewels Pvt. Ltd. and bring to you and exquisite line of jewellery collection:       

                                           Sparsh- touch of elegance 

A name to reckon with elegance shall leave you mesmerized with its intricate designs and inimitable craftsmanship. True to the essence of RSBL, RSBL DIA Jewels reflects the best what it has always been doing – “Strengthening the trust”.

Inspired by nature, this collection has a piece that engulfs ones soul. The collection comprises of 18K diamond jewellery that has pieces tailor made which suits every women’s varied moods and styles. Each masterpiece is crafted uniquely symbolizing the uniqueness that each woman carries within her. The brand promises the quality without compromise and it will always endeavor craftsmanship that's beyond comparison and at the same time maintaining the company traditions.

Sparsh – touch of elegance also has an exclusive collection designed for special occasions. Celebrate those enduring moments with its splendid pieces. Be the cynosure of all eyes on your wedding, charm everyone with your ornate jewels on your mehendi or bask in the glory of your inimitable jewels on the reception. Steal your betrothed’s heart on your engagement and relish everyone’s attention on Diwali with their unique and elegant jewels. The collection covers products like beautiful rings, pendants, ear rings, bracelets, and classy diamond sets etc. 

Keeping the design, style and quality in mind RSBL DIA jewels strictly adheres to quality and authenticity by providing certificate of purity and authenticity with each masterpiece. There would not be even a minor difference in the stated quality of diamond or gold. 

A truly unique service that Sparsh – touch of elegance will provide to its clientele is Buy back facility. It’s one of the first of its kind where a client can exchange their old jewellery of Sparsh – touch of elegance with a new one from its store.

Sparsh – touch of elegance jewellery is as inimitable as you, while the jewels are uniquely yours for these are designed especially for you. So, feel special with Sparsh – touch of elegance jewellery. With Sparsh – touch of elegance from RSBL DIA Jewels, RSBL shall continue to provide you with similar levels of service, upholding the same values and the commitment. 

I am glad that people of India now say, what is the RSBL price of Gold rather than Gold price. RSBL has strived hard to provide transparent benchmark prices for Gold. My motto has always been “Make products that meet customer needs”. Looking at the current pricing scenario of the Diamond jewellery market, I felt it is high time that we have a brand that people can trust, that provides value for money and most importantly provides transparent prices so that they can buy without any hesitation. Like Gold, diamonds have always given good returns. I am proud to bring Sparsh – touch of Elegance collection to you.

                                                   

Showroom Address: RiddiSiddhi Bullions Ltd, Bullion House, 115, Tambakata Lane, 2nd Floor, Opp Dagina Bazaar, Pydhonie, Mumbai - 400 003. India.

Web: http://rsbldiajewels.co.in/

IS GOLD LOSING ITS SAFE HAVEN APPEAL?

                                    -By Mr. Prithviraj Kothari, MD, RSBL (RiddiSiddhi Bullions Ltd.)

Last week started with festivities for India as we celebrated the auspicious day of Akshaya Tritiya on 13th may. It is considered auspicious to buy gold on this day and hence the demand for gold on this particular day is expected to go up.

But this year demand for gold was not as predicted.  Whatever demand came in was mainly from retailers because the wholesalers and other bullion dealers had already made their purchases during the gold crash that was witnessed between April 12- April 16. Majority  of the purchases were made during this period. Adding to this slide in demand were the anti LBT protests which brought the major gold hubs to a standstill and buyers were confused as to where to procure their gold from.
Hence the overall demand for gold on this Akshaya Tritiya was not up to the mark.

Though world over people were shifting focus from gold to other assets in its class, the lower prices attracted buyers in China-- the world's second largest buyer of gold after India. In fact in Hong Kong and Singapore, gold bars were traded at an all time high premium, paying nearly 40 USD.

In the international markets,  gold prices dropped compelling investors to shift to other asset forms apart from gold. It seems that gold is losing its appeal as a safe haven asset after the gold crash that recorded the worst daily crash in 30 years. This week too gold dropped to a four week low and a straight fall for a seventh session on Friday.

It was the longest flash in four years as there were rumours making rounds that soon the Federal Reserve may rein in the monetary easing, thus lifting the dollar.

One of the reasons behind this decline in gold prices is the perception of investors that gold below $1400 an ounce will take much time to bounce back and hence introduce near term pressure on gold. It has also triggered heavy selling and prompted investors to favour other asset forms.

Spot gold hit a four month low at $1376 an ounce.

There was heavy liquidation coming in from New York's SDPR Gold Trust, that reported an outflow of another 5.7 tonnes on Thursday, bringing the drop in its holdings this week to more than 10 tonnes.

A strengthening US Dollar and a massive selling of exchange traded funds, together, triggered a downfall in gold prices. Moreover, there is a positive sentiment in the market about the recovery of the US economy.

Economists are looking for a stronger growth in the second half of the year and in the early 2014.

Though the development is slow, economists say that the stronger than expected improvement in several areas including labour market and retail sales has compelled investors and general public to believe that development an recovery is on its way.

A stronger US economy brings in concern for gold as people tend to shift to other investment forms like equities that are bound to shoot up when the economy revives,

For this week, the range for gold in the domestic market is expected to be around Rs.25,000 - Rs.27,500 per 10 gram.


“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 - 

"Debate over Fed QE3 measures raises concern for gold" 

http://riddisiddhibullionsltd.blogspot.in/2013/05/debate-over-fed-qe-measures-raises.html

DEBATE OVER FED QE MEASURES RAISES CONCERN FOR GOLD

-By Mr. Prithviraj Kothari, MD, RSBL (RiddiSiddhi Bullions Ltd.)

Spot gold fell as low as $1,420.60 an ounce and was last down 1.4 percent at $1,437 an ounce on Friday.

Throughout the week gold seemed consolidated in a narrow range and on Friday the prices slid. A strong USD performance against major currencies, took the wind out of the sails of Gold yesterday.

There were lot of news making rounds on the last two days of the week. Majorly, the news came in from the US, showing signs of US economic growth. Weekly data showed that US layoffs fell to pre recession levels for the first time. Fed official had made an announcement earlier that a strong labour market will compel them to roll back easy money measures. This created nervousness amongst investors who now worry that if Fed curtails its bond buying programs then gold will decline even further.

Gold is always considered as a safe haven asset and investors purchase gold to guard against the perceived risk of a weaker dollar and higher inflation. But when the economy recovers investors shy away from the yellow metal and move focus to riskier assets like equities that are tend to give better returns in a recovering economy. Gold is priced in dollars and becomes more expensive for foreign buyers when the dollar strengthens against other currencies.

The Fed's quantitative easing measures have always been a major support to bullion in recent years and any such measure by the Fed of curtailing its policies will boost the appeal of stocks at the expense of gold.

Gold price direction next week is likely to be influence by the strength of the U.S. dollar, along with U.S. economic data. Another, Interesting news that will be the released, is of 13-F filings in the US next week on May 15, where institutional investors will report their holdings at the end of Q1 and market participants are keen to see whether prominent investor Paulson and others had reduced Gold holdings.

If the reports and economic indicators turn out to be balanced and better than expected the gold will decline further but if the data comes out lower than anticipated then it would push gold prices further.

Nonetheless the main topic for debate remains that what the Federal Reserve will do with its quantitative easing measures.

Meanwhile on the domestic front, there was surprising news for the bullion market. RBI (Reserve bank of India) made an announcement that banks can import gold only to meet the genuine needs of exporters of gold jewellery. The central bank also restricted the facility of loans against gold coins per customer to gold coins weighing up to 50 gm.

This move was taken mainly to curb the import of gold. But, I don't think that the new announcement by RBI will have much an impact on the prices or demand for the yellow metal. Imports too are not expected to decline too much.

In fact or focus now will be on the monsoons. If there will be an average rainfall then import would be around 800 tonnes. The reason behind this is the demand for gold that comes from rural areas. Around 60 per cent of gold demand is from rural areas. So an average monsoon will reduce their purchasing power and thus affect the demand for gold.

On the other hand a good monsoon can push up the import figures above 1000 tonnes.

In case that happens then prices are tend to go upward.

In the next 6 months gold is expected to move in the range of Rs. 25000 - Rs. 30000 in the domestic markets

“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 - "Gold on Life support"
http://riddisiddhibullionsltd.blogspot.in/2013/05/gold-on-life-support.html

GOLD ON LIFE SUPPORT

-By Mr. Prithviraj Kothari, MD, RSBL (RiddiSiddhi Bullions Ltd.)

Gold prices climbed up on Thursday and it showed recovery for the first time in 10 months as the metal's inflation-hedge appeal jumped following the ECB rate cut. Adding to this, the hopes of easing measures by the US Federal Reserve continued to boost gold and silver. The price of gold increased by 1.48% to $1,467.6; Silver rose by 3.40% to $23.81. During the week, gold rose by 1.0%; silver, by 0.2%.

Spot metal was last at $1,477.05/1,477.85 per ounce, up $10.35 on the close and making gains for the second session in a row. It has now also edged $1.55 above the previous weekly close, putting it on course for two consecutive higher weekly closes

Investors in the market were taken aback by the ECB when it decided to lower its short term interest rate to an all time low of .50 per cent. 

Jobless Claims report was due on Friday afternoon and gold drifted higher in its new range just before that. However, nothing happened as expected. The Jobless claims in US had reduced and the unemployment rate fell to 7.5 per cent. Just before the report was out gold was seen trading at 1487$ per ounce. However, later in the evening it dropped to 1445$. American employers took on more workers than forecast in April and the jobless rate unexpectedly fell to a four-year low of 7.5 percent, reflecting confidence in the outlook for the world’s biggest economy. Payrolls expanded by 165,000 following a revised 138,000 increase in March that was larger than first estimated, Labour Department figures showed today in Washington. Revisions added a total of 114,000 jobs to the counts for February and March.

The drop in jobless claims came as a surprise with economists expecting claims to edge up to 345,000 from the 339,000 originally reported for the previous week. Separately, the U.S. Commerce Department said the nation's trade deficit narrowed to $38.8 billion in March from a revised $43.6 billion in February. 

Officials at the Fed are still looking for greater progress in reducing unemployment. The central bankers said earlier this week that they plan to maintain their $85 billion monthly pace of bond purchases to spur growth and employment prospects and are prepared to raise or lower the level of purchases as the economic outlook evolves.

The Fed stated that though the jobless claims have dropped and the Labour market conditions have improved, the unemployment rate is still eminent.

Central bankers said that though we have seen a recovery in consumer spending, business investment and the housing industry the fiscal policy is restraining growth.

Till then gold seems to be on a life support system.

Trade range for gold for the  week is 1430- 1505 $ in the international market and in the Indian markets it is expected to move within 26500-28000 rupees per 10 gram.

“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 -
"Gold tend to move side ways"
http://riddisiddhibullionsltd.blogspot.in/2013/04/gold-tend-to-move-sideways.html

GOLD TEND TO MOVE SIDEWAYS

-By Mr. Prithviraj Kothari, MD, RSBL (RiddiSiddhi Bullions Ltd.)

As investors took profits in the precious metals market, gold witnessed a down fall on the last day of trading week. But if you look at the overall week, gold still posted its biggest weekly gain in 3 months. Bullion has recovered more than half of the loss of $225 per ounce incurred between April 12 and 16.

The main reason behind this price pick up was an extremely high physical demand for the yellow metal world over. In Asia particularly in Hong Kong, Singapore, Indonesia, Thailand and India gold was being sold at high premiums. Some analysts have described this as pent-up demand in which buyers pounced when presented with lower prices. This helped gold rise for the week.

The mid-April price decline also came at a key period for seasonal demand due to spring weddings in India, as well as the 15th May Akshaya Tritya festival, auspicious for gold buying. Bullion dealers in India put in great efforts to meet the strong demand, quoting premiums even as prices recovered partially since last week.

But while physical demand has been strong, China, the second-largest gold consumer after India, will be on holiday for three days next week for the May Day break, possibly removing significant support from the market

Apart from physical demand there has been sustained effect from the economic data coming in from the US. First-time claims for unemployment benefits fell by more than expected in the week ended April 20, the Labor Department said. The initial jobless claims fell to 339,000, a decrease of 16,000 from the previous week's revised figure of 355,000. Economists had expected jobless claims to show a more modest decrease, dipping to 350,000 from the 352,000 originally reported for the previous week. Investors in exchange-traded funds headed for the exits, worried about potential central bank sales of bullion and uncertainty over the outlook for U.S. monetary stimulus. 

Gold traders will have plenty on their plate next week. The basket includes-

• Central Bank Meetings
• U.S employment Report
• The U.S. Federal Open Market Committee Meet
• The European Central Bank meet
• personal income and spending Monday
• Chicago Purchasing Managers Index
• ADP private-sector employment report
• Supply Management manufacturing PMI
• initial jobless claims

Traders also will keep monitoring reports about the voracious physical buying that was unleashed by a sharp price decline in mid-April. Traders will find on May 3 out if the labor market has picked up, when the Labor Department releases the April report. 

And, as always, traders will be watching economic data to see whether conditions are improving or deteriorating so they can gauge for themselves what officials may do with monetary policy down the road.

India, the biggest buyer of gold, has been trying to limit imports to keep a lid on record current account deficit, and the economic advisory council expects the country to import $45 billion tons of the yellow metal in the year to March 2014.

In the coming week gold is expected to move in the range of 1405$- 1485$ in the international markets and in the Indian markets it will moving in the range Rs.26,000- Rs.28,500 per 10 gram.

“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  Launches 18th delivery center of RSBL SPOT in Hubli, Karnataka"

 http://riddisiddhibullionsltd.blogspot.in/2013/04/rsbl-launches-18th-delivery-center-of.html

RSBL LAUNCHES 18th DELIVERY CENTER OF RSBL SPOT IN HUBLI, KARNATAKA

Hubli, 24^th April, 2013:   After successful launch of RSBL eCoins in Andhra Pradesh, RiddiSiddhi

Bullions Ltd. (RSBL) is glad to launch its 18^th delivery center of online spot trading system RSBL SPOT (Flagship product) in Hubli, Karnataka.

This online system will enable clients to buy as well as sell precious metals like gold, silver and platinum. Since its first introduction in Mumbai, Maharashtra in the year 2008, RSBL SPOT boasts a 2500+ client base with 17 delivery centers across India. The city of Hubli will witness RSBL's 18th Authorized Delivery Center.

The company has launched two symbols:

1. 1Kilo Gold symbol. 995 purity, T+2. Symbol name: GOLDHUBT+2.

2. 100gms Gold symbol. 999 purity, T+2. Symbol name: GOLDHUB100

Hubli based symbols on RSBL SPOT will be preferably traded only with the intention of giving or taking delivery within a T + 2 cycle of trading, i.e. the delivery has to take place within 2 working days after the tradable day.

Speaking at the launch, Mr. Mukesh Kothari, Director, RiddiSiddhi Bullions Ltd. quoted,”Hubli being a hub by itself would enable all the jewellers/clients in the neighbouring regions of north Karnataka, to trade with convenience. As per our research, the need of the hour in Hubli is better price transparency in bullion market and benchmark rates. With our successful reach in 17 cities across India, I feel that RSBL SPOT is the system, the jewelers are looking for.”

As of today, RSBL SPOT online trading system is available in Ahmedabad, Bengaluru, Chennai, Coimbatore, Delhi, Ernakulum, Hyderabad, Indore, Jaipur, Hubli, Kochi, Kolkata, Pune, Rajkot, Surat, Thrissur, Trivandrum, Vijaywada with the head office located in Mumbai.

Clients with VAT certificate of Karnataka state would be eligible for registration with RSBL SPOT. Along with benchmark Prices and Price transparency, RSBL SPOT helps combat volatility risks due to live trading; covering Indian and International market hours (10.05 am to 9 pm IST). The system offers International live rates, research report, recommendations; news updates etc to make trading efficient. Though important features can be adapted quickly by beginners, there are many more features for advanced users, especially those who like trading technically. The application provides access to real time Indian bullion price quotes for everyone in the bullion ecosystem – jewellers, banks and investors.

“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 -
"Is it the end of the "golden" era? 
http://riddisiddhibullionsltd.blogspot.in/2013/04/is-it-end-of-golden-era.html

IS IT THE END OF THE "GOLDEN" ERA?

-By Mr. Prithviraj Kothari, MD, RSBL (RiddiSiddhi Bullions Ltd.)

Now when the whole world was writing about precious metals, the history crash, the further predictions etc I thought it was time to sit back and take a look at the whole scenario.

It was too early to comment as all that was happening was panic. Now that markets have stabilised, I would like to take this up for discussion.

To start off, clearly a lot of psychological damage has been done, as well as the practical damage of margin calls on leveraged positions and collateralised gold, so we should not expect a recovery as quick as the decline

The month of April 2013, will always be remembered in the history of gold as it was a record breaking drop in gold and silver prices in a single trading day. Gold saw its biggest two-day fall in 30 years, crashing to $1,322.06 an ounce as panic selling drove the precious metal’s price further downwards

I think that this correction was bound to happen and it happened here. A correction of 20-25 per cent was witnessed after 11 long years.

One of the main reasons was that Investors showed great concern on issues that European Government may have to follow Cyprus in selling part of their holding. This triggered panic selling thus hitting stop loss. Long positions were shifted to short. There was a negative sentiment that caught the market and it sparked sell off in gold.

Some say that the Fed and BOJ asset purchase led to the collapse of gold prices, some say it was ETF liquidation etc

I think finding 'a' particular reason will not explain the phenomena.

The bullion market shifted direction again as both gold and silver resumed their downward trend that started last week. Both precious metals slightly declined on Wednesday along with other commodities such as oil and leading “risk related currencies” such as Euro and Aussie dollar against the USD.

However, on Thursday gold market revived supports from the weak US economic data. Gold extended gains above $1,400 an ounce on signs that jewellers, investors and store of value buyers of gold are taking advantage of the biggest slump in prices in three decades.

Global demand for physical is very clearly seen in rising premiums being seen internationally. The drop in prices ignited a spate of buying in gold coins and bars, sending premiums for gold bars to multi-month highs throughout Asia. Demand intensified overnight as prices rose over $1,400/oz.

Spot gold started weakly, dropping to $1,385.50 in the Asian sessions, but it soon recovered, breaking above the resistance level of $1,400 to a peak of $1,425.25 per ounce – up for the fourth consecutive day and an increase of 5.5 percent on Monday’s close.

Market participants said there’s been a change in attitude in the gold market since the price break that began April 12. On the physical demand side, there’s been an enormous rush to buy, with news reports of strong demand and rising premiums over spot price for gold in many Asian countries. The U.S. Mint also reported very strong sales for gold coins.

Leading economic indicators and the Philadelphia Fed business survey both came in below forecasts. That bolstered ideas the Federal Reserve should not be backing off on its aggressive monetary easing policies any time soon.

The IMF too forecasted lower world economic growth, in the latest signal that major economies of the world continue to splutter or only see moderate growth.

Central banks are divided on whether gold is cheap enough to increase investment, after the two-day plunge through April 15 wiped $560 billion from the value of reserves. Sri Lanka’s central bank governor said falling prices are an opportunity for nations to raise gold reserves and that the island nation will consider buying more. The Bank of Korea said the plunge isn’t a “big concern” because holding the metal is part of a long-term strategy for diversifying currency reserves.

There is a Group of 20 meeting in Washington, D.C. that began on Thursday. The market place will pay close attention to any proclamations regarding foreign exchange rate, financial and/or economic policies coming out of the confab. 

For India, Decline in bullion prices has boosted domestic demand in the country, the world’s largest gold consuming nation.

As of now Gold is expected to move in the range of $1275- $1550 in the next six months in the international markets. Till the prices do not cross $1550, the market seems to be weak for gold.

“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 -
"Record breaking drop for gold and silver in a single day "
http://riddisiddhibullionsltd.blogspot.in/2013/04/record-breaking-drop-for-gold-and.html

RECORD BREAKING DROP FOR GOLD AND SILVER IN A SINGLE DAY

-By Mr. Prithviraj Kothari, MD, RSBL (RiddiSiddhi Bullions Ltd.)

Gold and Silver dropped drastically on Friday. Gold was down by 6 percent and silver 8 per cent. Gold was running at a 15 month low at $1484 and dropped by almost 80 dollars in a single trading day.

By Friday evening, gold dropped by Rs. 1050 per 10 gram and was trading at  Rs. 28180  while silver dropped by Rs. 2350 and was trading at 49,350 per kg in the Indian markets.

Even after markets closed, gold in the international markets dropped on Friday mid night. Gold slided around 20 dollars further late in the night.

This downfall effect was seen in the domestic markets on Saturday. Gold dropped by Rs.300 trading at Rs. 27900 and silver dropped by almost Rs. 900 trading at Rs. 48900.

The main reason cited behind was gold sell off by central bank. Some 158,200 taels of gold bullion ( roughly six tonnes) were sold in six auctions held by the State Bank of Vietnam.

There were news that as soon as the international markets opened, Merryl Lynch sold 4 million ounces of gold.

Heavy ETF selling was also seen in the markets.

What triggered panic selling amongst investors was a statement by Draghi. During a press conference he said that while Cyprus doesn’t have to sell its gold, any money that is raised from the sale must go towards covering the losses from the emergency loans to country’s banks.

This resulted in panic selling.

The important  US data released on Friday gave an indication that US wholesale prices aren't rising. Any such signal will prompt investors to sell Gold.

The next target for gold is 1450$ as gold is expected to decline further on the lines of a strengthening US economy.

“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 launches E coin trading system for the first time in Andhra Pradesh"
http://riddisiddhibullionsltd.blogspot.in/2013/04/rsbl-launches-e-coins-trading-system.html

RSBL LAUNCHES E COINS TRADING SYSTEM FOR THE 1ST TIME IN ANDHRA PRADESH

Hyderabad, 12th April, 2013: Following their grand success of the flagship product ‘RSBL SPOT’, India’s first fully electronic, over the counter (OTC), delivery based bullion trading system with over 2300+ clients across 17 cities in India, RiddiSiddhi Bullions Ltd. (RSBL), India's largest bullion trading company, is glad to announce their ingression of smaller denominated Gold bars in South market via RSBL eCoins. The antiquity and demand of gold in south Indian region has always been impressive. A recent report by Karvy Private Wealth says the four southern states account for over 40% of the nation's overall gold demand.

Even when the demand is promising, Issues like long queues for getting deliveries during peak seasons, institutions and banks often misguiding customers by way of offering discounts on smaller denomination Gold bar’s price etc have been common concerns in Andhra Pradesh. To counteract these issues, RSBL eCoins will provide its retailers/customers with live transparent benchmark prices along with instant trade and rate confirmations. 

‘RSBL eCoins’, a state of the art fully electronic over the counter smaller denomination Gold bars trading system, where buying/selling starts as low as 1gm, is a B2B model where Spot delivery will be given. There are no account opening charges, trading commission and terminal usage charges. The bars are available on the basis of real time pricing, thereby benefiting them to source their supplies at benchmark prices. The bars will be available on the terminal in widest range of denominations: 1, 2, 5, 10, 20 and 50 grams in .999 purity. The highly specialized client relation team will be available to provide technical support, during market hours. The system has the most comprehensive charting package that will help them trade efficiently using technical indicators.

The packaging of the smaller denomination Gold bars is very attractive that comes with a tamper-proof seal that meets international packing standards. Registered Clients can trade on this terminal via electronic devices like PCs, laptops, tablets, mobiles etc.

The official inauguration in Andhra Pradesh was done by Mr. Prithviraj Kothari (Managing Director): Riddisiddhi Bullions Ltd. Commenting on the occasion Mr. Kothari said, “It gives us immense pleasure to announce our entrance in small Gold denomination bars market of South India. Andhra Pradesh is a prosperous place, where people buy a lot of gold and related products like small denomination bars, jewelers etc. Looking at the market we see a huge potential of our eCoins system to flourish as RSBL SPOT system has.”

About RiddiSiddhi Bullions Ltd. (RSBL): Established in the year 1994, it has been amongst the market leaders in providing wholesale and retail level bullion delivery in the spot markets across India. It has made investing in Gold, Silver and Platinum the ‘in’ thing with its easy, reliable and user-friendly systems and products like RSBL SPOT, RSBL eCoins, Bullion++, Bullion India, RSBL Coins, RSBL DIA Jewels and so on. The company’s promoters have a combined experience of over 100 man-years in the industry. RSBL has received SME 1 rating from CRISIL Ltd., which is the highest rating on the SME rating scale. RSBL is a nominated agency for import of Bullion in India and also one of the few Indian companies associated with the London Bullion Market Association (LBMA). It holds a reputation amongst LBMA’s good delivery member international supplier and banks. It has also been certified as a PREMIER TRADING HOUSE status under the EXIM policy of Ministry of Commerce, Govt. of India. , are few of many such accolades. RSBL has carved a niche in the market for being the first ever consolidated bullion trading company in India.


“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 -
"2013: Dubai precious metals conference"
http://riddisiddhibullionsltd.blogspot.in/2013/04/2013-dubai-precious-metals-conference.html

2013: DUBAI PRECIOUS METALS CONFERENCE

Dear all,

I am glad to be a part of: Dubai Precious Metals Conference, 2013. Noteworthy speakers across the world shared their expert opinions.

Everyone in the conference had an opinion that Gold bull run is not going to end soon.

I was in Panel 2: Gold Consumption giants; opportunities linking the UAE with China, India and the US:-

Few excerpts from my speech:
The Indian bullion industry is very robust. What is the percentage of trade between India and UAE? What is the export import scenario?

Mr. Prithviraj Kothari from Riddhisiddhi Bullions Ltd. said that from 1997 to 2012, India imported around 12000 tons at an average price of USD600 an ounce. The import from UAE into India is around 140 tons a year. If UAE banks and traders leave their consignment with Indian nominated agencies and banks, they can improve trade with India. If UAE and Dubai traders and banks can follow the same rule, they can increase the trade to 250 tons.

India consumes around 500 tons of jewellery and the largest exporter of the world. What is the export percentage leads to UAE? How it will be improvised?

Out of total exports from India, 41% of is directed to UAE. It is for local consumption in UAE and re-exported to countries in Middle East and Africa. So DMCC and Dubai is a major partner of Indian export.

To view more, do check: http://dpmc.ae/liveupdates.aspx


“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 -
"Is gold set to enter the first bear market since 2008"
http://riddisiddhibullionsltd.blogspot.in/2013/04/is-gold-set-to-enter-first-bear-market.html