Tag: gold

What led gold prices to hit an all-time high today

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

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Gold prices soared to an all-time high on Monday (May 20). Spot gold jumped 1.4% to $2,448.98 per ounce as of 0614 GMT, having reached a record $2,449.89 earlier in the session. US gold futures also rose 1.5% to $2,453.20.

In India, the price of 24K gold surged by ₹540 to ₹75,160 per 10 grams, reflecting the global trend.

Key drivers behind the rally

US inflation and Federal Reserve expectations

Recent data indicating a cooling trend in US inflation has fueled speculation that the Federal Reserve might soon cut interest rates.

This speculation has supported gold prices, as lower interest rates decrease the opportunity cost of holding non-yielding assets like gold.

Traders now estimate a 65% chance of a US rate cut by September, according to a Reuters poll.

“A soft US dollar and expectations that the Federal Reserve is expected to cut rates soon has helped gold prices,” explained Kyle Rodda, a financial market analyst at Capital.com.

A subdued dollar makes dollar-priced gold more attractive to buyers using other currencies.

Geopolitical tensions

Increased geopolitical tensions have further driven the demand for gold as a safe-haven asset.

Recent incidents include a drone attack on a Russian refinery by Ukrainian forces, leading to its temporary closure.

Additionally, Houthi rebels attacked an oil tanker in the Red Sea en route to China.

Such uncertainties typically lead to a surge in gold prices as investors seek stability.

China’s influence

The upward movement in gold prices was also influenced by China, the largest consumer of bullion and industrial metals.

On Friday, China announced “historic” measures to stabilise its troubled property sector, which has provided additional support to the metals market.

“Gold prices sneaked in a cheeky record high ahead of China’s market open on Monday,” Matt Simpson, a senior analyst at City Index was quoted as saying in a Reuters report.

“Yet as the move has not been confirmed by a weaker US dollar, it seems to have been caught in a tailwind from higher metals futures on China’s exchanges,” he said.

What lies ahead?

Investors are now eyeing the minutes from the Federal Reserve’s last policy meeting, set to be released on Wednesday, along with comments from various Fed officials throughout the week.

This could provide further direction for the market.

Gold’s status as an inflation hedge remains prominent, particularly when juxtaposed with the potential for lower interest rates.

As global economic conditions and geopolitical landscapes evolve, the precious metal continues to attract investors seeking both security and value appreciation.

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Enam Holdings expect continued market growth with 14-15% returns, advises for gold investments

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

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Leading equity investment and investment services firm Enam Holdings is hopeful of another 14-15% return from the market during the current government’s tenure. Over the past ten years, the market has consistently delivered annual growth rates of around 14-15%.

Speaking to CNBC-TV18, Enam’s Investment Director Sridhar Sivaram said, “I will be very happy if we get another 14-15% in the current government regime. And I think the probability of that is very high, because this government has done a lot of reforms. So hopefully, the benefits of that we will see in the following year.”

Sivaram further acknowledged that certain parts of the market may be overvalued, which could lead to corrections in time or price. However, he remains confident that strong earnings will be seen in certain sectors, particularly in capital goods and utilities.

“We are very bullish on utilities, especially with the government focusing on increasing wind and solar energy. In general, we see the government spending almost ₹10-11 lakh crore on capital expenditure, which will benefit the sector,” he added.

Sivaram also emphasised the importance of gold as a reliable investment. He recommends maintaining 5-10% of your investment portfolio in gold, with sovereign gold bonds being the preferred method.

Over the past 20-21 years, both gold and the Sensex have grown from around 3,000-4,000 to 72,000-73,000, demonstrating similar long-term returns of approximately 14-15%.

Given its strong performance in the last five years and its effectiveness as a hedge against currency fluctuations, Sivaram continues to be optimistic about gold and advises adding to your gold investments.

Also Read | These gold mutual funds gave over 18% returns in one year

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Gold hits fresh record as Fed rate-cut optimism fuels demand

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

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Gold notched a fresh all-time high, as investor demand soared across the broader metals complex amid increasing optimism the US will cut rates this year.

Bullion jumped as much as 1.1% to hit $2,440.59 an ounce in early Asian hours, surpassing a previous intraday record reached in April. Traders have boosted bets in recent sessions that the Federal Reserve could reduce borrowing costs as early as September.

The US dollar fell and Treasuries rallied last week, after data released on Wednesday showed inflation in April eased more than expected. That offered support for the precious metal, which doesn’t pay interest and is priced in the greenback.

Hedge funds trading Comex futures boosted bullish bets on gold to a three-week high in the week ending May 14, according to the latest data from the Commodity Futures Trading Commission.

Elsewhere, geopolitical risks in Russia and the Middle East re-emerged after a Ukrainian drone strike on a small Russian refinery halted operations on Sunday, while a China-bound oil tanker was hit by a Houthi missile in the Red Sea on Saturday. Precious metals are among assets that tend to benefit from haven demand.

Spot gold was up 0.9% to $2,437.48 an ounce as of 9:12 a.m. in Singapore. The Bloomberg Dollar Spot Index was flat, following a 0.7% decline last week to its weakest in more than a month. Silver, palladium and platinum all climbed.

Meanwhile, silver was trading near an 11-year high, after a strong rally on Friday was helped by spillover sentiment in wider physical metals markets, where tightening supply has spurred investor demand for materials like copper. Unlike gold, the white metal is also considered an industrial commodity given its usage in things such as solar panels.

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Hot commodity silver sets pace as demand and deficit drive rally

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

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Gold’s record-setting rally may have captured the headlines this year, but it’s silver that’s running harder and faster as the less glamorous metal benefits from robust financial and industrial demand.

Silver has soared by almost a quarter in 2024, outpacing gold and making it one of the year’s best-performing major commodities. Yet in relative terms, silver is still cheap. It currently takes about 80 ounces of silver to buy 1 ounce of gold, compared with the 20-year average of 68

The two metals move largely in tandem as both offer similar macro- and currency-hedging properties. With gold hitting a record on central-bank buying, retail interest in China, and a resurgence in bets lower US interest rates are on the way, silver’s gone along for the ride. Although there’s been scant interest from investors in silver-backed exchange-traded funds, physical sales have picked up, including at Singapore-based dealer Silver Bullion Pte.

“Even clients who are interested in buying gold are starting to say ‘well, maybe I’ll buy silver first, and wait for the ratio to sort of rebalance’,” said founder Gregor Gregersen. Between April 1 and 25, the outlet sold 74 ounces of physical silver for each ounce of gold, compared with an average of 44 in 2023.

The white metal has already been making headway against its dearer cousin, in relative terms. Back in January, the gold-silver ratio was above 90, the most stretched since September 2022. Citigroup Inc. reckons that if the Federal Reserve proceeds with interest-rate cuts and economic growth stays strong in the second half, the ratio could move to around 70, although it cautioned that a slowdown would push it the other way, according to a note.

Silver has a dual character, valued both for its uses as a financial asset and an industrial input, including clean-energy technologies. The metal is a key ingredient in solar panels, and with robust growth in that industry, usage of the metal is expected to reach a record this year, according to the Silver Institute. Against that backdrop, the market is headed for a fourth year in deficit, with this year’s shortage seen as the second biggest on record.

That’s led industrial users – which typically rely on miners for supply – to seek ounces by draining the world’s major inventories, according to Silver Bullion’s Gregersen. Stockpiles tracked by the London Bullion Market Association fell to the second-lowest level on record in April, while the volumes at exchanges in New York and Shanghai are near seasonal lows.

Over the next two years, the LBMA stockpiles may be depleted given the current pace of demand, according to TD Securities. The headline figure overstates the available volume of metal given that it includes exchange-traded fund holdings, Daniel Ghali, a commodity strategist, said in an April note.

“We are slowly going to see supplies tightening because industrial demand is set to go higher,” Gregersen said. “If investors are also starting to buy, then I think in two or three months’ time, my biggest problem might end up being ‘Where do I find supply?’ rather than ‘How do I sell the silver?’”

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Gold prices near one-month high: What’s leading this rally

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

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Gold prices saw an uptick in India on Thursday, May 16, with MCX Gold futures for June expiry inching 0.02% higher at 73,117.00 per 10 grams. According to GoodReturns, the price of gold for 24 karat gold (999 gold) increased by ₹40 to ₹74,020 per 10 grams.

Internationally, gold prices showed a similar trend buoyed by a weaker dollar and declining bond yields following the release of US consumer inflation data.

Spot gold rose by 0.2% to $2,391.78 per ounce, nearing its one-month high.

US gold futures saw a 0.1% increase to $2,396.10.

The recent data indicating a moderation in inflation has boosted expectations for a Federal Reserve rate cut as early as September.

This has led to a drop in the dollar and Treasury yields.

Additionally, this has made gold more attractive to investors, as it tends to perform well in times of economic uncertainty and lower interest rates.

Tim Waterer, chief market analyst at KCM Trade, remarked, “With inflation coming off the boil, gold is effectively making hay while the sun is shining and looks poised to capture the $2,400 level.”

However, he also cautioned that potential rebounds in the dollar or treasury yields could pose challenges for gold prices in the near term.

Rahul Kalantri, VP Commodities at Mehta Equities highlighted that gold may find support at $2,365-$2,348 per ounce with resistance at $2,404-$2,422 per ounce.

In India, gold is supported at ₹73,630 per 10 grams and ₹73,410 per 10 grams with resistance at ₹74,190 per 10 grams and ₹74,390 per 10 grams.

In terms of outlook, Saish Sandeep Sawant Dessai, Analyst at Angel One, highlighted that gold prices are likely to stay afloat.

“This will be driven by a weaker dollar and lower Treasury yields amid growing expectations of a Federal Reserve rate cut,” he said.

As gold continues to be perceived as a safe haven asset amidst economic uncertainties, investors should capitalise on potential opportunities in the precious metals market.

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Gold prices could touch ₹78,000 within the next six months, says expert

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

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Gold prices in India will continue their uptrend and are likely to touch ₹78,000 per 10 gram within the next six months, according to Ajit Mishra, Senior Vice President of Research at Religare Broking.

“Short to medium-term targets, we are eyeing ₹74,000 for 10 grams as the immediate target and eventually around ₹78,000 for 10 grams in the next three to six months,” he said.

On May 15, prices for 24-karat gold gained ₹430 per 10 grams to ₹73,250.

Mishra recommends investors to keep adding gold to their portfolio gradually over the next few months instead of accumulating at the current levels.

“Unless it breaks ₹65,000 mark, we feel that it is likely to remain on the positive side. If it breaks ₹65,000 then this scenario might change. As of now, it’s something that one should look for accumulation on every dip with ₹74,000-78,000 being the probable targets.”

Read Here | Gold prices soar above ₹73,000 per 10 grams in India: What lies ahead for the yellow metal

In his recent report, Mishra identified six key factors that were supporting the ongoing upward movement in gold prices for the current calendar year.

These factors include persistent inflation, with no signs of slowing down, as well as the possibility of a rate cut by the US Fed by the end of the year.

Geopolitical tensions, initially involving Russia and Ukraine and more recently in the Middle East, have led to increased demand for safe-haven assets like gold.

Moreover, there has been a noticeable increase in central bank demand, particularly led by China, amidst a global economic slowdown.

Mishra highlighted that investment demand also continues to contribute to the appeal of gold. Taken together, these factors suggest that the momentum observed over the past three years is expected to continue into 2024.

CNBC Awaaz has an upcoming webinar Commodity Gurukul. Click here for more details

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

Gold prices soar above ₹73,000 per 10 grams in India: What lies ahead for the yellow metal

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

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Gold prices witnessed a rise on Wednesday (May 15) in India. The 24-karat precious metal prices surged by ₹430 to reach ₹73,250 for 10 grams.

Globally, gold prices remained relatively stable amid anticipation surrounding US inflation report, which could provide insights into the Federal Reserve’s future interest rate decisions.

Spot gold held firm at $2,357.35 per ounce, maintaining a narrow $6 range after experiencing a 1% increase on Tuesday.

Similarly, US gold futures saw a modest rise of 0.1% to $2,362.80 per ounce.

The US consumer price index (CPI) data, scheduled for release at 1230 GMT, is expected to reveal April’s core inflation.

The forecast indicates 0.3% month-over-month increase, slightly down from the previous month’s 0.4%.

Kyle Rodda, a financial market analyst at Capital.com, highlighted the significance of this data for gold, stating, “Gold is data-dependent at the moment.”

While speaking to new agency Reuters, he emphasised that gold stands to benefit if the CPI begins to decrease, given its resilience thus far.

However, a higher-than-expected CPI could unsettle markets and confidence in potential rate cuts.

Recent economic indicators have fueled expectations of impending rate reductions by the Federal Reserve, particularly following last week’s lackluster jobs report and softer-than-anticipated US payrolls for April.

Despite Fed Chair Jerome Powell’s reassurance regarding declining inflation through 2024 and the unlikelihood of further interest rate hikes, Tuesday’s data showing a greater-than-expected increase in US producer prices has added to market uncertainty.

Saish Sandeep Sawant Dessai, an Analyst specialising in base metals at Angel One stressed on the potential volatility in the gold market.

Rahul Kalantri, VP Commodities at Mehta Equities suggested that gold may find support at $2345-2328 per ounce, with resistance at $2380-2396 per ounce.

In India, he said that gold sees support at ₹71,410 per 10 grams and ₹71,260 per 10 grams, with resistance at ₹72,080 per 10 grams and ₹72,390 per gram respectively.

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Gold prices slip ahead of US inflation data announcement: Should you buy the dip?

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

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Gold prices fell nearly ₹430 on Tuesday (May 14) to trade at ₹72,820 per 10 grams. Globally, however, gold prices showed a slight uptick, as attention turned to forthcoming inflation reports.

This is crucial for gauging the US Federal Reserve’s stance on interest rate adjustments.

Spot gold, after a 1% decline on Monday, managed to rise by 0.2% to $2,340.77 per ounce.

US gold futures saw a similar increase of 0.2% to $2,346.30.

Despite this global trend, gold slipped from its three-week high due to concerns over a potential slowdown in the US economy against persistent inflationary pressures.

Bullion fell by as much as 1.1%, trading at $2,334 an ounce.

The anticipated release of the US producer price index data followed by the consumer price index added to the uncertainty.

Expectations are for core inflation to have risen by 0.3% month-over-month in April, potentially pulling the annual rate down to 3.6%.

Kelvin Wong, a senior market analyst for Asia Pacific at OANDA, pointed out that if gold maintains its position above the $2,320-$2,330 range, it signals short-term bullish momentum.

However, he noted that the current support for gold prices stems from stagflationary risk scenarios.

The recent weak jobs report and softer-than-expected US payrolls data for April have fueled expectations for rate reductions.

Many economists are now predicting two key interest rate cuts starting in September, as per a Reuters poll.

Vikas Jain, Senior Research Analyst at Reliance Securities, echoed concerns over a potential slowdown in the US economy versus persistent inflationary pressures.

“This could hinder the Federal Reserve’s plans to lower borrowing costs,” Jain said.

So, should  one buy the dip?

Experts recommend including gold in portfolios for diversification as a hedge against market volatility.

With gold rates having witnessed gains of approximately 15% in domestic bourses in 2023, experts advise allocating 8-10% of the investment portfolio to gold.

Religare Broking suggests seizing the opportunity to accumulate gold through systematic investment plans (SIPs), especially during market dips.

The brokerage advises initiating SIPs as long as gold prices maintain above ₹68,500 per 10 grams.

Religare has set initial upside targets of ₹74,000 and ₹78,000 per 10 grams.

However, they caution that a decisive break below the previous swing low of ₹65,200 per 10 grams could disrupt this trend.

This could lead gold to retest the range of ₹63,300 to ₹63,800 per 10 grams.

Click here to register for CNBC Awaaz’s upcoming webinar Commodity Gurukul

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

MobiKwik launches Daily Gold Savings Plan: How it works

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

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Fintech company MobiKwik has announced the launch of Daily Gold Savings Plan. The will help users to save small amounts daily, MobiKwik said in a statement.

With this, users can opt for either daily, monthly or one-time SIPs.

The daily SIP plan facilitates sachet saving.

One of the key features of the Daily Gold Savings Plan is that users who make daily SIPs exceeding ₹51 are eligible to have the costs of one SIP covered every quarter.

MobiKwik has partnered with SAFEGold for its reliability of gold purchases, the fintech firm stated.

Additionally, the plan will offer users the flexibility of selling or gifting their gold holdings anytime, with doorstep delivery at no extra charge.

Bipin Preet Singh, Co-founder & CEO, MobiKwik, said, “Gold has long been regarded as one of the safest mediums of savings, standing the test of time. Our Daily Gold Savings Plan aims to digitise and democratise this tradition, making it accessible to everyone.”

Gold is often used as a hedge against economic uncertainty and inflation as it tends to have a low correlation with other asset classes like stocks and bonds.

For investors, experts suggest adding gold to the portfolio as it can help diversify risk.

If investors are looking to diversify investments and reduce overall portfolio risk, allocating a portion to gold may be beneficial.

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