Tag: Gold Prices

Gold prices steady amid geopolitical tensions: Check city-wise rates today

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The price of 24-carat gold exhibited a marginal decline of ₹10 in early trade on Friday, April 19, according to data sourced from the GoodReturns website. 10 grams of the precious metal were valued at ₹73,790.

The disparity in gold prices across key Indian cities is evident, as depicted in the following table:

Globally, gold has been buoyed by escalating tensions in the Middle East, particularly between Israel and Iran.

Investors, seeking refuge from geopolitical uncertainty, have flocked to gold, driving its prices higher, according to news agency Reuters report.

US gold prices surged on Friday, poised for their fifth consecutive weekly gain, reflecting the ongoing demand for safe-haven assets amidst political turmoil.

Everett Millman, chief market analyst with Gainesville Coins, emphasised the role of geopolitical tensions in influencing gold prices.

“When there are geopolitical tensions, the natural response is for investors to flee to gold, which is happening now,” he was quoted as saying in a Reuters report.

Millman suggested that in the event of further escalation, gold prices could soar to $2,500-2,600 per ounce, whereas a ceasefire could prompt a decline to $2,200.

In the domestic market, experts foresee a continuation of upward momentum.

Notably, the yellow metal has already surged more than 15% in the past three months and emerged as the best-performing asset class since the beginning of 2024.

Nirav Bhansali, a member of the Gem & Jewellery Export Promotion Council (GJEPC), predicts further growth, stating that gold prices may surge to ₹75,000 per 10 grams by the year’s end.

ALSO READ | Why this may be the right time to go for a gold loan

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Gold prices gain on weaker dollar — check rates in your city today

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gold prices were steady on Thursday (April 18), driven by a variety of factors both at home and abroad. According to data from India’s Multi Commodity Exchange (MCX), gold prices were trading around ₹73,030 per 10 grams, marking an increase of ₹45 compared to the previous day.

Futures contracts mirrored this trend, with prices edging upwards to ₹72,549 per 10 grams from the previous figure of ₹72,523.

Across major Indian cities, including Ahmedabad, Mumbai, New Delhi, Chennai, and Kolkata, gold prices hovered around the ₹74,000 per 10 grams mark.

(Source: CNBC Awaz)

Internationally, gold prices experienced a similar trajectory, with spot gold increasing by 0.8% to $2,379.33 per ounce at 10.01 am GMT.

This rise was attributed to a weaker US dollar and heightened investor concerns over geopolitical tensions, particularly in the Middle East.

“The weakening dollar has been supportive of precious metals across the board today. There are also other supportive factors like geopolitical risks and central bank diversification that have played a role,” Bank of China International (BOCI) analyst Xiao Fu was quoted as saying in a Reuters report.

Geopolitical tensions, including escalations between Israel and Iran, alongside the European Union’s decision to increase sanctions against Iran, contributed to market uncertainty.

Investors sought refuge in assets perceived as safer, including gold, amidst these geopolitical uncertainties.

However, analysts remain cautious about the sustainability of this upward trend.

The Federal Reserve’s cautious approach to rate cuts, as highlighted by Federal Reserve Chair Jerome Powell, and the potential for profit-taking could exert downward pressure on gold prices in the near future.

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Why this may be the right time to go for a gold loan

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gold prices are currently trading above the ₹72,000 per 10 grams mark on the Multi Commodity Exchange (MCX). While these high gold prices may be a problem for those purchasing gold, they benefit those seeking gold loans.

One of the primary reasons behind the optimistic outlook is the direct correlation between rising gold prices and the advantageous position of gold loan borrowers.

As gold loans are secured by the pledged gold, the surge in gold prices translates into a higher value for the collateral.

This implies that borrowers can potentially access larger loan amounts against the same quantity of gold compared to periods of lower prices.

Mehak Srivastava, Head of Marketing at SahiBandhu Gold Loans, highlighted the favourable timing for individuals to explore gold loans.

“Taking out gold loans at this time could be beneficial because gold prices are rising. Given the recent price increase, borrowers may be able to obtain a bigger loan amount than in previous times,” she told CNBC-TV18.com.

Notably, the yellow metal has surged more than 15% in the past three months and emerged as the best-performing asset class since the beginning of 2024.

Looking ahead, experts foresee a continuation of this upward momentum.

Nirav Bhansali, a member of the Gem & Jewellery Export Promotion Council (GJEPC), predicts further growth, stating that gold prices may surge to ₹75,000 per 10 grams by the year’s end.

Economic factors such as inflation and interest rates are expected to play significant roles in shaping future gold prices.

With such projections, securing gold loans becomes increasingly appealing.

Historical data also underscores the correlation between the popularity of gold loans and fluctuations in gold prices.

When gold prices surge, there is a corresponding increase in the demand for gold loans, primarily due to the enhanced value of the collateral.

“Conversely, during periods of low gold prices, the demand for gold loans may decrease as borrowers adopt a wait-and-see approach, anticipating a future uptick in gold prices before leveraging their gold assets,” Srivastava said.

Factors to consider

The value of the gold deposited as collateral determines the amount of the gold loan. At the moment, banks offer a loan to value (LTV) of 75%, whereas other financial service providers lend up to 60%.

This means if the gold is worth ₹1 lakh, the person can get a loan for ₹75,000.

The interest rates on gold loans, availed by pledging gold, are notably lower than other types of loans, ranging between 8-26% per annum.

Additionally, banks and financial institutions in India offer gold loans with amounts ranging from ₹1,500 to ₹1.5 crore, with repayment tenures spanning from three months to four years.

A look at gold loan rates of some of the lenders:

(Source: Bankbazaar)

Gold loan platforms play a crucial role in facilitating access to offers and essential information about gold loans, including interest rates and tenures from various banks.

By leveraging such platforms, borrowers can compare and identify lenders offering competitive interest rates for specific loan terms.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Gold price may go up to $3,000 an ounce, says Citi

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Analysts at Citi said that the international price of gold may hit $3,000 an ounce as more money flows into the exchange-traded funds backed by the yellow metal.

The current price is a little less than $2,400 per ounce in Singapore at 1 pm local time, an all-time high for the international gold prices — triggered by the rising possibility of a war between Iran and Israel.

Gold prices have gained more than 20% since mid-February despite the lack of ETF inflows.

Gold ETFs’ holdings had declined by 120 tonnes since the beginning of 2024 to 2,542 tonnes as of April 10. In 2023, gold ETF holding fell by 254 tonnes, according to data from Bloomberg.

Citigroup expects the average price of gold to be about $2,350 an ounce  in 2024 before a 40% jump to $2,875 in 2025.

Gold prices rise when there’s a fear of uncertainty like a conflict or a pandemic. People invest in gold as a hedge against inflation.

Analysis by CNBC-TV18’s Sonal Sachdev showed that investing in gold would have helped beat inflation by 400 basis points.

Meanwhile, gold prices recorded a hike on the Multi Commodity Exchange (MCX) on Tuesday, April 16, 2024.

Gold futures, maturing on June 5, 2024, stood at ₹72,813 per 10 grams on the MCX, after recording a jump of ₹536 or 0.74%.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Decoding the recent surge in gold prices: Here are key ways to invest in yellow metal now

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gold prices witnessed a slight decline on Monday (April 15). On the Multi Commodity Exchange (MCX), gold contracts for June delivery traded lower ₹80 or 0.23% at ₹71,763 per 10 grams in a business turnover of 22,483 lots.  This dip, attributed to profit booking and weak global cues, reflects a momentary shift in market sentiment.

However, analysts emphasise that despite this minor setback, the overall trend for gold remains bullish, with prices reaching new heights in recent times.

Understanding market dynamics

Geopolitical tensions

The ongoing conflict between Iran and Israel continues to fuel uncertainty in the global market.

This geopolitical turmoil has been a significant driver of gold prices, as investors seek refuge in the precious metal amid heightened risk perceptions.

Central bank buying

Central banks around the world have been actively increasing their gold reserves, contributing to the upward trajectory of gold prices.

This steady demand from institutional buyers has provided a strong foundation for the metal’s value.

Interest rate expectations

Speculation regarding potential interest rate cuts by the Federal Reserve later in the year has further supported gold’s appeal.

Lower interest rates reduce the opportunity cost of holding gold, making it an attractive investment option in times of economic uncertainty.

What comes next?

Rahul Kalantri, VP of Commodities at Mehta Equities Ltd, maintains a positive outlook for gold, citing ongoing support from global central banks and persistent geopolitical risks.

However, Colin Shah, MD of Kama Jewelry, believes that the price of gold will continue to be volatile and highly unpredictable, given the escalations between the countries in conflict and the response by G7.

Investment strategies

Investors seeking to capitalise on the current market conditions may consider various strategies for gold investment, including:

Physical gold

Investing in physical gold, such as bars or coins, provides investors with a tangible asset that can serve as a hedge against economic uncertainty and inflation.

Gold Exchange Traded Funds (ETFs)

Gold ETFs allow individuals to invest in gold in a dematerialised format, which can be bought and sold on the stock exchange like shares.

Gold equivalent to physical quantity is deposited in an electronic form, in the purchaser’s demat account.

These are listed on the stock exchange, where one can get real-time updates about their price. ETFs don’t have any exit loads, which means investors can buy or sell the units at any time during the market hours.

Sovereign Gold Bonds (SGBs)

SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash, and the bonds are redeemed in cash on maturity.

It is considered a safe way to invest in gold, especially for those with a long investment window of 5-8 years.

The Reserve Bank of India (RBI) issues SGBs multiple times a year and fixes a price for each issuance. Users can also buy or sell SGBs in the secondary market.

Gold mutual funds

Gold mutual funds are open-ended funds that allow the citizens to invest without a Demat account. The gold fund units are determined by way of Net Asset Value (NAV), which is disclosed at the end of the trading hours. In this scheme, experts manage the investment professionally to create wealth and reduce risks.

Units of gold funds can be redeemed by selling them back to the fund house based on the NAV for the day.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Gold rises as Iran strike against Israel stokes haven demand

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gold jumped at the open after Iran’s unprecedented attack on Israel over the weekend drove demand for haven assets.

Bullion rose as much as 1.2% to near a record high as the conflict in the Middle East entered a dangerous new phase, before paring around half of that gain. The Islamic Republic fired more than 300 drones and missiles against Israel, though most were intercepted and there were no fatalities reported.

The precious metal broke through $2,400 an ounce on Friday, but closed the session lower as technical indicators indicated its rally had run too hot and investors liquidated positions. The latest developments in the Middle East rekindled the flight to safety, with fears over a potential retaliation by Israel likely to support gold in the near term.

Gold has surged by almost 20% since mid-February in a rally that’s taken many investors by surprise. The Federal Reserve moving closer to its much-anticipated pivot, robust buying by central banks and increased demand from Chinese consumers have been the main drivers, along with rising geopolitical risk in the Middle East and Ukraine.

Spot gold rose 0.6% to $2,359.10 an ounce as of 7:32 AM in Singapore, after rising by 0.6% last week. The Bloomberg Dollar Spot Index dipped 0.1%, following a 1.3% gain last week, the most since September 2022. Silver advanced, platinum was steady, while palladium slipped.

Also Read: Indian mission in Israel issues advisory amid ongoing Iran-Israel tensions

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Gold prices rise to ₹72,120 per 10 grams: How long will this rally continue?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In the wake of escalating geopolitical tensions, gold prices have surged both domestically and globally. On Thursday, April 11, the price of 10 grams of pure gold (24-carat) hovered around ₹72,120 in the domestic market.

Internationally, spot gold climbed to $2,345.56 per ounce, marking a 0.6% increase, with US gold futures also rising by 0.6% to $2,362.80.

The rally in gold prices has been attributed to several factors, foremost among them being higher-than-expected consumer prices persisting for the third consecutive month, thus challenging the Federal Reserve’s tolerance for inflation.

Data revealed that US inflation in March exceeded forecasts, effectively diminishing the likelihood of a rate cut in June, according to news agency Reuters.

This unexpected inflation surge has led market strategists to anticipate a longer period of tight monetary policy, consequently supporting the appeal of gold as a hedge against inflation and geopolitical uncertainties.

Central bank purchases, safe-haven inflows amidst ongoing geopolitical risks, and momentum-following fund demand have collectively fueled gold’s 14% gain so far this year.

Moreover, recent strong US economic indicators, including a robust jobs report that surpassed expectations, have raised doubts about the feasibility of rate cuts in the near future.

Higher interest rates typically reduce the attractiveness of holding non-yielding assets like gold, but the prevailing geopolitical tensions have counteracted this effect, further propelling gold prices upwards, a Reuters report said.

What lies ahead?

Looking ahead, experts foresee a continuation of the upward momentum in gold prices.

Nirav Bhansali, a member of the Gem & Jewellery Export Promotion Council (GJEPC), predicts that gold prices may surge to ₹75,000 per 10 grams by the end of the year.

Economic factors such as inflation and interest rates are expected to significantly influence future gold prices.

What should investors do?

Waiting for a price drop may not be advisable, as there is no guarantee of a decrease, and prices may continue to rise beyond reach.

Given gold’s immediate protection against inflation and its role in diversifying investment portfolios, investors should assess their portfolios and consider allocating a portion, typically 10% or less, to gold.

This strategy can help hedge against market uncertainties and maintain portfolio diversification amidst volatile geopolitical and economic conditions.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

This commodity expert sees silver at ₹100,000 per kg by year-end

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Kishore Narne, Head-Commodity and Currency, Motilal Oswal Commodity Broker believes silver has the potential to hit ₹1 lakh per kilogram by the close of the year.

“But Silver has a tendency to outperform itself in any scenario either downside or upside. So, we are expecting it to extend this rally to around ₹36-₹36.50 which will take it briefly above ₹1 lakh in Indian prices,” he says.

He sees the price hitting this target likely before August or by the end of this year.

Metal prices are seeing a sharp rally with many making record highs.

Comex Silver has hit a three-year peak. Gold prices have reached an all-time high of $2,360 per ounce, while Zinc has climbed to a one-year high above $2,700 per ton.

Copper has also surged to a 14-month high due to strong fund buying.

Talking about precious metals and its prices, Narne highlighted three key factors.

Firstly, he pointed to anticipated monetary easing in Western countries, particularly the United States, as a primary catalyst.

Secondly, he highlighted a noticeable uptick in central bank buying, notably citing China’s sustained procurement of gold, which bolsters physical demand.

Thirdly, the persistent deficit in the physical silver market, which could mean persistent scarcity in the foreseeable future as the demand continues to rise.

These factors, including increased investment demand via ETFs, serves as a potent cocktail propelling both gold and silver prices skyward.

Among base metals, Narne is bullish sentiment on zinc and copper.

He expects strength in copper prices to continue, with targets ranging between ₹900-950 in the short to medium term.

“Zinc is something which is again because iron ore and steel itself is going up. So I think galvanising demand is surging up so zinc can see another 15 to 16% rally from here,” he said.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Will the rally in gold and stocks coexist for the rest of 2024?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Even though both gold prices and equities are marching to record highs, the former is likely to outperform equities this year as the expectation of an interest rate cut creates more excitement around the yellow metal. Further, a weakening dollar index also impacts gold prices.

Ahead of Wednesday’s US CPI release, the US dollar extended its fall for the fifth day in six trading sessions. Conversely, gold prices have rallied close to 30% from their October lows. Bullion added another 1.1% on Tuesday and is currently hovering at $2,365.35 per troy ounce.

However, a simultaneous rally in both risky and haven assets is very uncommon. Generally, both display an inverse relationship with each other, even though easing by the Federal Reserve should benefit both stocks and gold.

So far in 2024, gold prices have rallied by as much as 14.1% against last year’s return of 13.1%. In contrast, the dollar-denominated Nifty Index has gained just 4.1% since the beginning of the year. The outperformance of precious metal is happening for the first time since 2020. While the Nifty Index generated an average return of 16.2% between 2021 and 2023, gold yielded just 3% during the three years, with negative returns in both 2021 and 2022.

Historically, the stock market has been a better investment than gold. For instance, the Nifty Dollar index has been generating positive returns over the last eleven years through 2023, except in 2015. In contrast, the gold ended in the green only in five instances since 2013.

Economists attribute multiple reasons for the recent uptick in gold prices. According to them, heightened geopolitical risks in the Middle East and Ukraine, along with increased volatility in dollar value, have pushed the prices of yellow metal higher.

Moreover, buying by central banks also weighed on the latest surge in gold prices. Central banks buy gold as a measure to diversify their forex reserves and hedge against foreign currency risks. As part of their foreign exchange reserves, many central banks across the globe hold significant amounts of gold as reserves.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Gold prices soar to new heights on Gudi Padwa: Should investors buy, sell or hold?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Gold prices extended their rally on the day of Gudi Padwa – a spring festival marking the start of the lunisolar new year for Hindus. Domestic gold futures scaled a new record high, surpassing the ₹71,100 mark per 10 grams.

The trigger for this surge came as treasury 10-year yields climbed to the highest since November. This was buoyed by positive sentiments regarding China’s central bank increasing its gold reserves in March.

The Multi Commodity Exchange (MCX) witnessed gold futures contract for June 2024 expiry opening at ₹71,026 per 10 grams and reaching an intraday high of ₹71,125.

Globally, gold prices continued their upward trajectory, with spot gold reaching $2,345.09 per ounce.

Analysts have noted that gold has emerged as the ‘asset of choice’ in financial markets, driven by central bank buying and speculative flows. The minutes of the Federal Reserve’s March policy meeting, along with the impending release of US Consumer Price Index (CPI) data, are anticipated to provide fresh signals for investors, according to news agency Reuters.

The Fed’s decision to hold interest rates steady in March, coupled with reduced expectations for the number of rate cuts this year, has influenced market sentiment.

Despite the risk posed by potential inflationary pressure from the CPI data, gold has demonstrated resilience against rising bond yields, which could bode well for its medium-term outlook.

Looking ahead, industry experts offer insights into what lies next for gold prices and whether now is the opportune moment for investors.

Chintan Mehta, CEO of Abans Holdings on Commodity, highlighted various factors contributing to the enduring strength of gold, including geopolitical tensions in the Middle East, persistent inflationary pressure, and the dovish stance of the Federal Reserve.

Mehta emphasised the importance of upcoming CPI data and the Fed’s meeting minutes in shaping future interest rate trajectories.

Despite the current high levels of participation in gold, Mehta suggests that the precious metal remains a favorable investment opportunity, with potential for consolidation at current prices and opportunities for accumulation at lower levels.

“Currently, we are observing a rally up to ₹72,200 per 10 grams. On the downside, gold may experience a correction down to ₹65,400 per 10 grams levels,” Mehta said.

Anuj Gupta of HDFC Securities added another dimension to the gold price rally, attributing it to the occasion of Gudi Padwa.

Gupta noted that this festival serves as a domestic trigger for increased gold purchases, particularly in regions like Maharashtra and northern India.

The cultural significance of Gudi Padwa and its association with gold buying traditions contribute to the expected surge in retail bullion market demand.

In conclusion, while gold prices continue their upward trajectory, investors should carefully evaluate their investment strategies considering the broader economic landscape and upcoming market indicators.

Despite short-term fluctuations, gold’s status as a safe-haven asset and its appeal in times of uncertainty suggest that it remains a compelling option for investors seeking stability in their portfolios.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow