RSBL Gold Silver Bars/Coins

Tuesday, 26 May 2020

Where everything else is falling, Gold seems to pretty tempting

History has proved time and again that following major factors have always sent triggers and brought about a rally in gold prices

  • Financial market cyclicality 
  • Economic crisis.
  • Geopolitical stress.
  • Monetary instability.

Any one of these four factors possesses the power to drive gold prices here. But today, we don’t have to choose — all four are combining to trigger the gold-buying impulse.
One virus was enough to trigger all of the above factors.

Furthermore the extraordinary 12-month gold-price bull run shows no sign of ending. Despite predictions of a bubble set to burst, the yellow metal has risen by 36% during the past 12 months says Bullion king of India. Gold prices ended higher on Friday as testiness between the U.S. and China fed risk-off sentiment, drawing investors into assets considered to be havens, including government debt and the Japanese yen.
Further to the above factors, even drivers of money flow into safe haven assets and also support gold. Lately, the gold has been moving majorly due to the following reasons-

US-China tension escalation- The Wall Street Journal on Thursday reported that U.S. senators were introducing a bipartisan bill that would sanction Chinese officials and entities that enforce the new Hong Kong laws, and penalize banks that do business with the entities.
With the crisis in Hong Kong picking up, stock markets in Asia and the U.S. declined, resulting in “safe haven buying for both gold and silver.

The U.S. has threatened a very harsh retaliation if China challenges Hong Kong’s autonomy, which then could lead to U.S. implementing more tariffs. Those tensions aren’t likely to influence gold for long as the market tends to overreact once news hits, but still gold prices are bound to go up regardless of that giving hope to the top gold dealer in India.

Concern of second wave crisis drove money flow into safe haven assets- the immediate reason gold is finding support came from testimony to the Senate Banking Committee earlier this week by US Treasury Secretary Steve Mnuchin and Jerome Powell, chair of the country’s central bank, the Federal Reserve. According to the Seattle Times, Mr Mnuchin emphasised re-opening American workplaces to get the economy moving again, while Mr Powell suggested more stimulus measures may be needed which is why central banks have been pumping money into the markets.

Supply demand- This time around, the coronavirus is causing interruption on an unprecedented scale, including the supply of physical gold says RiddiSiddhi Bullions Limited. Three of Europe’s biggest gold refineries are based in the Swiss canton of Ticino. On March 24, cantonal authorities ordered all three refineries to close.

This perfect storm of a strangled supply and soaring demand has led some analysts to speculate that gold prices could reach an all-time high in 2020 – over $1920, which the current high is reached in August 2011.

Except, there’s plenty of evidence that this time is different, and gold could even outperform its previous rallies during market uncertainty. Consider that during previous major stock market crashes, such as the 2008 financial crisis or Black Monday in 1987, there were no other externalities affecting the price of gold, which was purely driven by supply and demand

However, analysts said continuing plans to reopen economies that have been frozen by the COVID-19 pandemic and hope for remedies for the virus have limited the upside in precious metals, sending gold lower for the week.

There was a slight slip on Monday morning as gold prices price lost 1.23% in early trading to stand at $1,735.25 an ounce. But the pattern of recent months has been decisively upwards, making it difficult to predict further for the bullion dealers in India.

The economic unease caused by the COVID-19 situation has prompted many investors to consider moving their assets into gold. But with the masses all thinking the same thing, what’s the market outlook for the yellow metal?
Interest in the metal has been growing recently in light of the pandemic as one of the safest and most resilient assets for investors. Russia, however, started to build up its reserves long before the crisis emerged.

Russia has become a saviour of the global gold markets as the pandemic has spurred abnormally high demand for the precious metal while it has at the same time also crippled companies' ability to produce gold in the amounts requested by market players

During that fateful mid-March week, gold prices also took a beating as investors fled to liquidate all assets. The price of one troy ounce of gold fell from a high of above $1670 on March 9 to below $1470 nine days later.
If you’d bought gold back in 2018 when it was trading around $1200, that represents returns of 50%. Even at the current prices, the all-time high would provide a return of over 12%. In a market where everything else is falling, those numbers appear to be pretty tempting says Prithviraj Kothari RSBL.

Friday, 22 May 2020

Gold Prices stomping back

Last Friday, gold prices hit their highest level since September 2012, at $1,762 and reaching record highs in many other currencies.
Gold prices were seen storming back towards their mid-Aril highs, with investor appetite up amid sustained market volatility.

Gold’s rise is amazing in that Japan and Europe are deep in a recession with their stock markets tanking, and the U.S. is just entering a recession, with most other major asset classes falling – except gold.

Gold prices settled higher Wednesday for a second session, as economic stimulus measures boosted demand for the precious metal against the backdrop of economies attempting to reopen from the COVID-19 pandemic giving bullion dealers in India some hope.

Precious metals gained after Fed Chair Powell’s bearish comments. Federal Reserve Chairman Jerome Powell told lawmakers the Fed was looking at extending access to the credit facilities to additional borrowers, including states with smaller populations.
The Senate committee was warned by the head of the central bank that the current downturn is considerably worse than any recession since World War II and that long-term unemployment could damage the economy.

This means that the path to economic recovery will extremely difficult and slow says RSBL. Which is why, he reiterated his commitment to use a full range of tools to support the economy, including leaving interest rates near zero until the economy is back on track. This saw safe haven buying remain strong, with gold prices pushing back towards USD1,750/oz. This will surely brig about a rally in gold prices, which was already being witnessed during this week which looks promising for top gold dealer in India.

Furthermore, demand for insurance against heightened uncertainty could help sustain the recent upward move in gold prices, and duly has revised its forward price projections. Here’s also a now-famous prediction of Bank of America for $3,000 gold by the end of 2021, with their equally famous four-word response to the printing-press paper profusion: “Fed Can’t Print Gold.”

A renewed outbreak of COVID-19 in Northwest China rattled investors. Authorities have subsequently reinstated lockdown measures for 108m people in provinces, including Jilin and Liaoning

Elevated uncertainties linked to the flood of liquidity into the financial system and the increase in global debt, coupled with elevated geopolitical uncertainties, may further increase safe-haven demand for gold says RiddiSiddhi Bullions Limited.

Wednesday, 20 May 2020

Gold Set to rally on Diversification Demand

The gold price has reached its highest level in almost eight years due to financial market concerns about the corona crisis. The price of the precious metal is on the rise this year as investors are looking for safe havens to invest in because of viruses giving hope to the top gold dealer in India.
Gold rose to the highest in more than seven years after the Federal Reserve said stocks and asset prices could suffer a significant hit from the coronavirus pandemic, and warned the process of economic recovery may stretch through until the end of next year.
On one side , national Economic council Director Larry Kudlow said on Friday that U.S and China were working on implementing the deal and on the other hand , U.S President Donald Trump declared that he was “not thrilled” with the phase one U.S.-China trade deal reached in January

And if that was not enough, the Trump administration blocked chip supplies to Huawei Technologies, with investors on edge fir a reported possible Chinese retaliation.

The price of a troy ounce of gold (31.1 grams) is now around $ 1760, the highest level since October 2012. The price continued to rise following warnings from President Jerome Powell of the US Federal Reserve about the economic damage caused by the corona virus can cause.

Gold and silver broke higher this week as we started to see the dreadful damage done to the global economy from many weeks of inactivity. Precious metals look set to rally further on safe-haven and diversification demand making bullion dealers in India hopeful.

Monday’s gain in gold came in after data released Friday underscored how hard virus-related shutdowns have hit the world’s largest economy. U.S. retail sales and factory output registered the steepest declines on record in April.

The coming months are likely to see a wave of bankruptcies, major negative corporate earnings revisions and with that, the risk that unemployment will remain stubbornly high. Self-imposed social distancing will keep the whole experience industry from travelling and exhibitions, to restaurants and cinemas under pressure for months to come.

Furthermore, Commercial real estate could be among the hardest-hit industries should the health crisis deepen, the U.S. central bank said in its twice-yearly financial stability report Friday. Separately, Chairman Jerome Powell said in an interview with CBS that a full recovery of the U.S. economy could drag through 2021 and depends on the delivery of a vaccine.
Meanwhile, U.S. Federal Reserve Chair Jerome Powell warned in a “60 Minutes” interview that the U.S. economy could shrink up to 30% in the second quarter. Although the U.S. could avoid a second Great Depression in the long run, a full recovery would depend of the development of a vaccine.
Powell also added that the Fed was willing to deploy more ammunition to aid in economic recovery if needed.

Bullion has surged 16% this year as the spread of the virus curbed economic growth, roiled markets, and prompted vast amounts of stimulus to be unleashed by governments and central banks says RiddiSiddhi Bullions Limited.

For the firm believers of bullish sentiment for gold, here are some key analyses by Bullion king of India that will strengthen their belief further-

1. Firstly, we have central banks cutting interest rates and heading to zero or lower. The Swiss National Bank, the European Central Bank and the Bank of Japan all currently have negative interest rates. For many countries, where inflation levels are higher than interest rates levels money in the bank will simply lose value year on year. Therefore, investors who have moved into cash will be looking to place their cash in a safe haven.

2. Following more than a month of range bound trading, gold finally managed to break the shackles that had kept it tied to $1700/oz. Renewed stock market weakness, a warning about the outlook from the U.S. Federal Reserve and a continued surge in the number of people joining the jobless queue are just some of the recent drivers.  In the last three recessions gold has increased in value, so as a hedge for a recession gold does have strong appeal.

3. Furthermore with large scale quantitative easing (QE) programmes undertaken by central banks around the world and some analysts anxious about high stock valuations, gold offers a hedge against such devaluing risk. QE devalues a currency, so money is literally losing value. This is why many analysts would recommend have a portion of your portfolio in gold. History may not be repeated, but the fundamental outlook for gold is currently very strong.

4. Souring U.S.-China relationship, as well as other bleak news, will lead investors to turn to the safe-haven yellow metal.

The Covid-19 pandemic remains very difficult to beat and it carries the risk of re-emerging in places where it had been knocked back. While still not under control in many countries, the U.S. and others risk a prolonged impact with some states or regions attempting to reopen before having the virus under control. RSBL gold says that the recovery is probably set to be more problematic than the optimists think, with gold set to benefit from the enormous boost to money supply that is going to follow.

Tuesday, 12 May 2020

Everyone wants to own gold

Gold does very well as a calamity hedge, and I think we would all agree that this is definitely a calamity right now.

In times of uncertainty, economic and otherwise, gold is considered a safe haven investment, a fact which is further being corroborated by the current movement of gold prices and demand for all forms of gold investments, be it bullion, paper gold, spots and futures says Prithviraj Kothari RSBL.
Gold performs well in any situation- inflation or deflation. We need not worry. And currently, we all know that a ton of money has been pumped into the market for recovery.
And when you look at the stock market over the last few weeks, the stock market’s gotten boastful giving bullion dealers in India some good news.
But, the yellow metal, the traditional haven of choice, has increasingly found its fate in the greenback as a competitor over the past two years when calamity struck, whether it was Covid-19 outbreaks, tumbles on Wall Street or breakdown in U.S.-China trade endeavours. The dollar and the yellow metal were considered to be inversely proportional to each other.
The same phenomenon was on a display again on Monday as both U.S. gold futures and the spot price of gold fell under the $1,700 support level, while the dollar index regained its balance on above the key 100-point mark critical to dollar bulls.

The US dollar strengthened on Monday as appetite for the US dollar as safe-haven currency increased amid concerns over economic reopening.

Gold prices extend the rebound making it look positive for the investors and the top gold dealer in India, as the risk-off sentiment seeped into Europe amid fears over the second wave of the coronavirus outbreak and escalating Australian-China trade tensions.
The dollar has been a major barrier for gold. Gold prices are very much into a consolidation phase, thanks to the US dollar.

Furthermore, The White House is suffering a mini-outbreak of Covid-19 with Vice President Mike Pence’s Press Secretary Katie Miller testing positive, while Anthony Fauci and Robert Reid, two other senior health officials on the coronavirus task force, are on self-quarantine, according to reports. Pence and President Donald Trump have tested negative so far.
On the global front, both China and South Korea reported new spikes in coronavirus cases, with Seoul recording 34 new cases, its biggest single-day jump in about a month. In Germany, the closely-watched reproduction rate Covid-19 had climbed to 1.1, meaning 10 people with the virus could infect on average 11 others.

The US dollar strengthened on Monday as appetite for the US dollar as safe-haven currency increased amid concerns over economic reopening.

Events in Korea over the weekend brought a reminder of the risks of second waves of coronavirus infections, with Seoul closing down all nightclubs after 34 new infections were tracked down to one club.

But there remain much fear in the market about how the post Covid-19 recovery will play out, none more so than assessing the challenges economies face removing restrictions amid the coronavirus pandemic.

With many countries in the West attempting to reopen their economies, attention has turned to whether new infection rates will remain low as mobility picks up.

A recent study by the World Gold Council (WGC) found that gold figures in the top five investments; people are investing more in the yellow. On average people invested 28 per cent of their income in gold in 2016, which has gone and up to 33 per cent in 2019. It also found that most people preferred to invest in gold due to "ease of buying" which has kept the top gold dealer in India positive even in these difficult times.

In the domestic market too there are renewed worries of India’s fiscal and further possible lockdown only going to deteriorate this. The ballooning fiscal deficit moved to staggering 5.5%+. This is the real dilemma for the Government of India- to arrange the deficit as high as 4.75 lac crore- which seems difficult as the GST and al otter taxes are depleting fast.

The concern surrounding an upward creep in real interest rates, as an extremely weak economy forces price expectations lower while the Fed stays steadfast to its commitment to keep Fed Funds above zero, also contributed in reducing length.
The escalating tensions between U and China will give sudden pop-up rally to gold from$1700-$1715 initially and later maybe $1730 but a stop is crucial at $1688.

All this suggests that you may want to own gold for what’s happening now. It would certainly help if you had gold in your portfolio for the grim economic events that are yet to unfold. And you clearly want to own gold for those things we hope that never happens says RiddiSiddhi Bullions Limited.

Friday, 8 May 2020

Second wave of Covid-19 creates panic

We are currently facing a plethora of seemingly enormously adverse economic data being released by governmental statistical entities, and this data is likely to get worse before it gets better.  Indicators like unemployment levels, PMI readings, retail sales figures, manufacturing output etc, are all continuing to get worse.

We're going into a recession. We don't know how deep it will be or how long it will be. Debt is increasing. Governments are having massive increases in debt to raise the funds to get through this crisis. So, there's an awful lot of uncertainty in the market going forward. Gold doesn't pay any interest, but with interest rates at zero or even negative in Europe and Japan, gold is now competitive with interest-bearing instruments says Prithviraj Kothari RSBL.

U.S private sector ADB job losses were worst in this sector, for the month of April .Though this came broadly on expected lines, there was a big panic since for over 8 weeks now.  US government and U.S. Fed, both are putting in massive stimulus to avert this nightmare situation.

Gold price recovered Monday from last week’s drop as investors keep embracing safe-haven assets during a tumultuous economic environment hit by the covid-19 pandemic giving top gold dealer in India some hope.
The logistics of transporting physical gold have also been impacted by the pandemic, with the precious metals industry scrambling to keep the market moving. Transportation costs have surged about 60% as a result of the worldwide lockdowns, increasing the premiums paid for metals.

As we see a gradual easing of all the restrictions and businesses start to reopen, that will certainly have an impact on precious metals prices says RiddiSiddhi Bullions Limited. WHO and CDS fear a significant danger of a second COVID-19 wave and if at all that happens, gold prices will rally giving bullion dealers in India assurance.

Gold is becoming attractive in this environment where uncertainty is very high, growth is expected to weaken, and at the same time you have negative real rates which make gold attractive to hold as a diversifier in investor portfolios
The surge in gold is set to continue with a test of $1800 the next big round number in sight

Tuesday, 5 May 2020

Growing potential for gold to cross $1800

Gold opened on a positive note this week, as US President Donald Trump threatened to impose more tariffs against China over the coronavirus pandemic, which Trump alleged originated from a lab in China.

The uptick in geopolitical risks is the primary catalyst due to renewed US-Sino tension after the White House put China in the crosshairs. On Friday, after a White House press conference, President Trump said that he had a high degree of confidence that the Covid-19 pandemic originated in a laboratory in Wuhan, while simultaneously threatening sweeping tariff retaliation towards China.

Post Mr. Trump’s statement, fresh trade tensions began to haunt global market. It raised the safe haven appeal for gold all over again. In fact Trump and other government officials restated their allegations that China failed to alert other countries about the pandemic in time and was responsible for the rampant spread of the virus worldwide. Trump stated last week that he was exploring ways to retaliate against China for spreading the virus globally and hiking tariffs was one option under consideration.

Moving onto Covid -19 and how the path of recovery would be. Gold has also turned bullish after Fed officials highlighted long-term risks to economic recovery if the US is not careful about resuming economic activity in the aftermath of the pandemic. Despite rolling out several stimulus measures, the US central bank has hinted that it could unveil more efforts to support economic recovery in the US, a sign that once again serves to boost the safe haven appeal of gold.

Gold has also gained on the back of disappointing economic data releases from Japan in the Asian session, with Tokyo’s consumer prices experiencing the first decline in three years during April. Meanwhile, the Japanese manufacturing sector continues in contraction on account of the coronavirus pandemic.

The COVID-19 pandemic has brought a pause to economic activity around the world. The coronavirus crisis has killed hundreds of thousands, incapacitated millions and affected the livelihoods of billions, prompting policy makers to fear a deflation spiral reminiscent of the Great Depression

The US, a key driver of the global economy, now accounts for a third of global infections and deaths related to COVID-19, exceeding 1 million infections and 60,000 deaths. US jobless claims have already exceeded 30 million, driving unemployment to 15% or higher. This data has propelled the gold price remains high. The unprecedented fiscal and monetary expansion by governments and central banks has boosted investment demand for gold, as liquidity floods the financial markets and reduces the opportunity cost for gold investors.

The interest rates close to zero continue to favour the upside for gold by keeping real rates in negative territory for now. Gold faces serious demand headwinds from a lack of consumer spending in China and India, but healthy investor appetite is propping up demand at present.
That comes as investor interest continues to grow in this environment of uncertainty and negative real rates. And in these situations, gold always becomes an investors favourite says Bullion King of India.

As the scale of the pandemic — and its potential economic impact — started to emerge, investors sought safe-haven assets.
Large government expenditure to stimulate “flagging economies” hit by Covid-19 has raised concerns over debt in a future without the virus.
Steps needed to keep workers safe will mean even businesses that are able to restart production will generally be running at low capacity, and most will be operating in an environment of greatly reduced demand.

Last week, the World Gold Council released its first quarter 2020 demand trends report for the precious metal, where it highlighted that the global coronavirus outbreak was “the single biggest factor influencing gold demand. Bullion dealers in India are certain that this might not drastically affect gold. Rather gold is becoming attractive in this environment where uncertainty is very high, growth is expected to weaken, and at the same time you have negative real rates which make gold attractive to hold as a diversifier in investor portfolios and good news for top gold dealers in India.

Gold is strengthening as stocks pull back amid concerns about “restarting” many states amid the COVID-19 pandemic and with markets even more concerned with the U.S. hardening its stance against China again, with the threat of tariffs that could derail Chinese purchases. Amidst all this there’s “growing potential” for the price of gold says RiddiSiddhi Bullions Limited to break $1,800 per ounce.

Saturday, 2 May 2020

The path to recovery will be gradual

We have seen that gold has been moving sideways since early April taking everyone including the top gold dealer in India on a ride. It is trading above Feb-March highs, but it looks like a consolidation within a medium-term uptrend for the yellow metal.

On one side it has managed to cross some important levels, on the other side it’s struggling to hold above the measured base objective at $1700/05/ Moreover, the upside momentum is weakening near-term and the threat of a consolidation phase is growing.

The main reason for this kind of behaviour in gold as suggested by the Bullion king of India, Prithviraj Kothari is the on-going USD funding crunch that is holding financial markets hostage at the moment. As a result, gold was sold off alongside the equities melt-down as global investors rushed to raise cash in order to make up for the losses.

But if we see the longer perspective, we can say that once this USD funding crunch dissipates after 2Q, gold should respond well to the massive amount of global monetary policy easing. By then, there is significant default risk as the global economy slows down drastically. Hence, gold’s safe haven role should return with a vengeance. Furthermore, recent global lockdowns have resulted in a shortage of physical gold as global transportation links get cut. As such, we would expect Gold to rebound significantly in the quarters ahead giving bullion dealers in India reassurance.

But currently, the broader picture speaks about world economies especially US. The global GDP is down almost 3.5-4%. Though the situation wont remain the same forever, but one thing is clear is that the path of recovery will be gradual and that it is going to be very hard for the next few quarters, at least across all the commodities, with maybe gold being the exception .

One more thing that catches attention is gold supply. Of late, mining capacity has suffered a setback due to COVID 19 and the lockdown situations globally. We all know that in times of uncertainties, demand for the yellow metal rises says Riddi Siddhi Bullions Limited. The same is going to happen soon but physical availability of gold is limited.
We've seen central bank buying and with interest rates the way they are, and the investment demand and the bullion side and ETFs being extremely strong, it could very well be very hard to source physical gold to where it's needed.

But with interest rates and carry costs the way they are, keeping gold in vaults will make a lot of sense, people will buy it as a hedge and insurance, and therefore there might be some scarcity that we haven't really seen before, where the flows from vaults into the physical market would not occur as readily.
Hence we can say the slowly growing economies, increased demand and restricted supply, combined together will play a pivotal role in influencing gold prices.

What is clear is that COVID-19 has resulted in sudden falls in global economies and commodities markets, with supply disruptions on a global scale never witnessed before. The resulting shockwaves have produced a great deal of uncertainty in terms of the future global growth outlook, and this includes the outlook for commodities.