-By Mr. Prithviraj Kothari, MD, RSBL (RiddiSiddhi Bullions Ltd.)
Currently the entire market is in a confused state of mind as far as gold is concerned.
The market has split in two parts. Some say gold will rise while the others take an opposite stand.
This week we came across some interesting figures in gold:
- On Friday, gold was trading at $1340 - almost $160 higher than the three year low of 1179$ that it hit on June 28
- Gold has risen consecutively for the third week until Friday and also its first three weeks rise since March.
- On the other hand, in terms of value gold has also lost a fifth of its value as investors lost faith in gold.
Many buyers also indulged in profit-taking by cashing in from gold's Friday session high of 1340$.
Initially, Fed chairman Bernanke has stated that the Fed may scale back its $85 billion monthly bond purchases. But now there is no clarity on the timeline for this activity as he further states that scaling back of the stimulus program depends on the recovery of the US economy.
The market now digests news that Russia, Ukraine and Azerbaijan were among eight countries that increased their gold holdings in June, data from the International Monetary Fund showed, while Turkey, Germany and seven other countries shed some of their bullion.
As far as the Asian markets are considered, China's gold demand could hit a record 1,000 tonnes this year, the World Gold Council said on Thursday, which means it would overtake India as the world's biggest bullion consumer.
But investors still have a mixed basket of feelings for gold. The appetite to carry large positions overnight may decline ahead of the next crucial week of data.
The U.S. Federal Reserve will announce its policy decision on Wednesday, as will the European Central Bank and Bank of England on Thursday — and on Friday, the U.S. Labour Department will release its widely watched monthly jobs report.
Now what we have to wait and see is that whether these vital reports will pull down gold or push it up.
Demand from India has taken a setback but is now expected to rise. Monsoons play a key role for demand coming in from rural areas. Also August marks the onset of the festive and marriage season. But since the government has taken measures to curb imports, in spite of physical demand there isn’t much gold available in the market to meet the demand.
Gold support is at $1,321 and $1,307. Resistance is at $1,340 and $1,355. Silver support is at $20.78 and $19.40, resistance is at $20.70 and $20.90.
“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 Has Found A Support"
http://riddisiddhibullionsltd.blogspot.in/2013/07/gold-has-found-support.html
.jpg)