Tag: Gold investment

View | Gold policy intervention is required

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

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India’s love affair with gold continues unabated. Licit imports of gold are in the range of about 750 tonnes annually. As per the RBI’s half-yearly report on foreign exchange management, the RBI has 743.84 metric tonnes of gold as of end September 2021. In value terms the share of gold in the total foreign exchange reserves is at a high of nearly 5.88%

Our foreign exchange reserves at the end of November 2021 were at $640.4 billion, the fourth largest in the world. As per a 2018 Niti Aayog report, ’Transforming India’s Gold Sector’, an estimated 23,000-24,000 tonnes of gold is lying unused with households and religious institutions throughout the nation.

Yet smuggling continues — through land and air, concealed in body orifices, in vehicles, in machine parts, as molten metal. The smugglers’ ingenuity being matched only by the customs officer’s alertness. The Rajya Sabha on December 21, 2021, was informed that 7,288 kg of gold had been seized in the last three years from 2019-20 to November 2021. And seizures admittedly represent a small portion of what has been smuggled.

Demand accompanied by supply restrictions imposed by tariff barriers fuels smuggling. We initially restricted all import of gold. We liberalised. Import was permitted at a specific rate of Rs 300 per 10 gm — this translated to about 1 percent and dramatically reduced smuggling. We today have a 7.5 percent basic custom’s duty rate.

Also read: Gold outlook for 2022: What brokerages say

Several other policy measures have been put in place. November 2015 witnessed the launch of three schemes — the Gold Monetisation Scheme, (GMS), the Sovereign Gold Bond scheme and the India Gold Coin. Schemes which the Prime Minister in his inimitable style described as ‘sone pe suhaagaa (icing on the cake)’.

The hope being that citizens would bring out the gold lying dormant to take advantage of these schemes. It was believed that import of gold would come down — implicit in this was the belief that smuggling also will come down.

There was also the Hallmarking scheme. The Bureau of Indian Standards (BIS) Act was amended to provide for hallmarking sale of gold jewellery– whereby unique identification numbers guaranteeing purity are provided to each piece of jewellery.

In early 2021, GMS was revamped (R-GMS). It is estimated that about 22-24 tonnes of gold have so far come under GMS — a very small percentage of the 23-24,000 tonnes of gold said to be in the economy. There are currently only about 950 hallmarking centres in the country. We are currently in the series VII/VIII/IX and X of the RBI’s sovereign gold bond scheme. 

Also read: Sovereign gold bonds or physical gold: Where to invest?

Smuggling however continues. It has a multiplier bad impact on the economy. It generates black money, spawns hawala transactions; its proceeds finance other criminal activities. It results in loss of legitimate jobs.

It is obvious that the present basic customs duty rate provides profits which outweigh the risks. As a policy we have never accepted the fact that gold is an integral cultural part of the lives of an average Indian. We always believed that import needs to be checked for fear of a drain on foreign exchange. 

Given our reserves, it is time to take a relook. We could reduce the basic customs duty of imported gold-reduce it enough to make the risks of smuggling not worthwhile. And juxtapose the revenue which duty from imported gold generates with the enormous damage which smuggling results in.

With the Union Budget around the corner, this is an ideal time to examine the entire policy on gold. Basic customs duty needs to be reduced enough to make smuggling unattractive. Policy makers could also consider bringing down the rate to the current prevailing GST rate of 3 percent. It would result in decrease in customs revenue and increase in imports initially — and have an adverse impact on the current account deficit. But with exports going up, this is a fallout we can live with.

There should be a robust system of tracing licit imports of gold all along the value chain. This is essential to ensure that that gold stays in the licit economy.

The R-GMS needs to be relooked at. The interest of 2.5 percent which the scheme presently offers is low. This should be increased. Much as I am against an amnesty scheme which in effect rewards the evader of tax, R-GMS should act as an amnesty scheme. No questions should be asked about the source of the gold. A provision should be made in the R-GMS to give back the gold article in its original form if the depositor so desires. This is especially true in respect of ornaments which are family heirlooms.

Also read: Gold vs Bitcoin: History of returns, mining, performance and more

Another policy measure required is also to look at gold Dore –cthe semi-pure alloy of gold which is permitted to be imported at a lesser duty currently at 6.9 percent. Obviously, the duty on such Dore imports also needs to be correspondingly reduced. There are serious concerns that such gold Dore which comes primarily from Africa can potentially be linked to conflict, human rights violations and other abuses. London Bullion Market Association (LBMA) has put in place a Responsible Gold Guidance (RGG). This outlines the responsible sourcing requirements. We should adopt these standards.

 Dubai is the major source of gold — both licitly imported and smuggled. We should not lose sight of this fact even as we are negotiating an FTA with UAE.

For a government which invests so much in publicising its schemes, the schemes regarding gold have had little publicity. This should be addressed imaginatively.

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Samvat 2078: Corrections & dips are good opportunities to buy gold: Motilal Oswal’s Kishore Narne

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

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The start of Samvat 2078 could well turn out be the cherry on the cake for the commodities sector, which is bracing for its best annual performance in a decade. While higher investment on public infrastructure made metals shine, continued improvement in the global demand for commodities became a catalyst.

To discuss the key themes that emerged in the commodities sector in the year gone by and the road ahead, CNBC-TV18’s Manisha Gupta spoke to Naveen Mathur, Director – Commodities and Currencies of Anand Rathi, Kunal Shah, Head of Commodities & Currency Research at Nirmal Bang Commodities, Kishore Narne, Head of Commodity & Currency at Motilal Oswal Commodity, and Pritam Patnaik, Commodities Head at Axis Securities.

On gold, Narne said, “Things are very simple right now, one is inflation, the other is whether the Fed is going to cut down the money supply or not and the third and the last one is the alternative asset class, that is the equities and the risky assets ― these three are key components of decision-making as far as gold investment is concerned.”

“In my view, especially when we look at the long-term picture rather than the short-term day-to-day activities, I think gold becomes a crucial part of the portfolio rather than a tactical asset as the tactical asset component actually keeps changing.”

He added, “But should I buy now? If you are doing a tactical investment, once the Fed comes out probably you get a kneejerk correction; corrections and dips are good to buy. If you are looking at 12 months, I think Rs 52,000 is a target which you can look at for the next 12 to 18 months. It is a decent return, but the pace will definitely disappoint you.”

Read Here: Dhanteras 2021: Options to consider for gold investment this Diwali

On the super cycle in commodities, Shah said, “I don’t think it is a super cycle in commodities. I think we have seen the best; whatever we have seen in metals is the best and I don’t expect that to continue going forward in the next year. There are three reasons mainly for that. One, inflation. Inflation is the biggest worry and all the liquidity what we have seen from the central banks is not permanent. It is a short-term measure which central banks have taken in order to combat the ongoing pandemic. So, when your money loses value, the value of commodities shoots up and all commodities generally rally. So, maybe agricultural commodities, metals, oil, gold, or any other commodities, but now, things are different.”

“Now, Chinese growth is faltering, a slowdown is taking place in China. So, what have you seen in the last 10-15 days? Steel prices are down by 30 percent. Already we are starting to see this in metals, this entire slowdown of China being played out. So, the bullish trend, what we saw was mainly on account of the supply concerns. So, (I’m) not bullish for next year, sell metals on rallies. I am not expecting any major fireworks coming out of this.”

Also Read: Paytm’s #YehDiwaliGoldWali offer: Get additional gold worth Rs 5,000 on buying digital gold; here’s how

On crude oil, Patnaik said, “Clearly, there is a supply constraint where demand is outstripping supply now. This is primarily due to the global economic opening up post COVID; there is a huge demand. But the energy crisis, which we have seen due to (the shortage of) natural gas, and coal has kind of aided crude oil prices to rally further. But is this rally going to continue unabated? I really don’t think so. We are going to see a little bit of volatility throughout the year in my opinion. If the winters were to turn out to be more severe that will impact natural gas prices, and you could see a little push in crude oil prices; you could see it crossing the $100 mark.”

“However, will it sustain there. I really doubt it because come summer or if you have a milder winter, you would see a sharp correction in natural gas prices, which would then impact the whole demand or the pressure on crude oil prices. That said, am I negative on crude oil? No, actually I will be conservatively optimistic on crude oil. My sense is that in Indian terms, we will see levels of Rs 6,100, I think that is a good time to enter because towards the end of the year, we could even see Rs 6,800-6,900 levels in crude oil. So, like I said, conservatively optimistic on crude oil.”

For full interview, watch accompanying video…

Also Read: Dhanteras 2021: Can’t afford gold jewellery? Here’s how and where to buy digital gold at just Re 1

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

Dhanteras 2021: Can’t afford gold jewellery? Here’s how and where to buy digital gold at just Re 1

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

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Dhanteras is here and so is the time considered auspicious to buy gold. While gold remains one of the most popular investments in India, young investors and many others still reeling under the impact of the COVID-19 pandemic may not have enough sum set aside to buy gold jewellery, coins or bars. But, there is surely something they can do—digital gold to the rescue.

With digital gold, one not only enjoys the ease of not having to go down to the jewellery store to purchase physical gold and loosen the purse strings, but people can start investing with just Re 1.

Digital gold, as the name suggests, is digital in nature and so is the process to buy and sell it. This means people can have a certain amount of gold linked to their digital account and they can sell it or get it delivered to their homes as and when they want.

Also Read | From SGB to ETFs: How to invest in gold this festival season

Customers need to pay 3 percent goods and services tax (GST) too over the cost of gold they purchase. In case one plans to convert digital gold into physical and get it delivered, the person will have to pay additional making charges, which depend on the quantity. Shipping charges may also be applicable.

While people can purchase digital gold via specific vendors and refiners, they can skip that hassle too and choose to invest through popular e-payment platforms like Paytm, Google Pay and Amazon Pay, which act as middlemen between the customer and trading companies.

Also Read: Can one buy digital gold and exchange it for jewellery later?

Here is how you can invest in digital gold

Investing in digital gold is as simple as shopping for groceries or fashion on any e-commerce site. Most platforms have a similar process.

Here’s a look at how you can invest in digital gold via Paytm, which offers gold from MMTC-PAMP India Private Limited:

Step 1: Open the Paytm app, scroll down to ‘Buy Gold’ and click on it

Step 2: You will see the options to buy, sell, gift and deliver gold

Step 3: Below it, you’ll see two sections amount and weight

Step 4: You can enter a value in either of the sections as per your requirement (this amount will be exclusive of 3 percent GST). The amount value can be as low as Re 1

Step 5: Click on proceed to pay

Step 6: Enter your name and pin code following which the invoice will be generated

Step 7: Make the payment via your Paytm wallet, UPI, debit/credit card, or net banking

You can follow the same process to sell from the digital gold locker or gift the metal by choosing the ‘Sell’ or ‘Gift’ option. To get the gold delivered to your place, you can click on ‘Delivery’ and select from the coins available.

Also Read: Is digital gold a good bet in current scenario? Here’s what experts suggest

Where to buy digital gold from

Multiple platforms allow people to buy digital gold. Here is a look at a few websites and apps from where people can make digital gold purchases:

Google Pay: MMTC-PAMP manages the digital gold service on Google Pay. Customers can avail the Gold locker section on the Google Pay app to buy and sell gold.

Paytm: Like Google, the Paytm Gold service is also managed by MMTC-PAMP. Users can either buy and sell gold through the app or their payment platform’s website https://paytm.com/digitalgold

BharatPe: Bharat Pe also offers digital gold services in partnership with Safe Gold. People can buy gold for as low as Rs 1 via the platform’s app.

Amazon Pay: People can avail the gold vault on Amazon Pay that allows them to buy and gold.

PhonePe: The digital payment app lets people invest in gold starting at just Rs 10 via its app. On PhonPe, customers get the option to choose from Safe Gold or MMTC-PAMP.

MMTC-PAMP: Apart from partnerships with several websites, MMTC-PAMP offers digital gold services through its own website as well.

Tanishq: Jewellery brand Tanishq also offers people the option to buy and sell gold online. It has an arrangement in place in partnership with Safe Gold. Buyers can purchase digital gold for as low as Rs 100 by visiting their website https://www.tanishq.co.in/digigold/buy

Airtel Payment Bank: Those who use the Airtel Payments Bank app can avail the DigiGold service available on it. Customers can invest in digital gold using the Airtel Thanks app as well, where they get the option to sell and gift digital gold.

Though the process to buy digital gold is extremely simple, users must read all the FAQs on the respective apps and websites before making the final call.

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

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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

Cracking new investment opportunities: Alternative assets to explore this Diwali

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

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India might be one of the few countries that celebrate a festival as important as Diwali by taking important investment decisions during the five days of celebration.

While Samvat Muharat Trading remains an investor favourite for years, investors who wish to build a diversified and well-balanced portfolio are always looking for good opportunities in alternative assets to add into their investment basket along with equities.

Here are some alternative investments that Indian and NRI investors can consider, this Diwali:

Commercial Real Estate: Conventional wisdom for any kind of investment asset is to buy the entity with a cheaper/inexpensive valuation but strong fundamentals. The same extends to commercial real estate. The Knight Frank – FICCI – NAREDCO Real Estate Sentiment Index for both current and future projections has improved across all parameters in Q3 of 2021. This fairs well at a time when real estate market prices are at an all-time low in the market. This makes commercial real estate attractive for the investors.

A recent report by JLL shows that India’s office space is in fact one of the safe havens for real estate investors from across the globe. Since these office spaces are mostly occupied by technology companies, their strong growth potential offers investors stable rental yields. In fact, investments in the office sector make up the largest share of the pie, with $26 billion in investments to date. This is approximately 43 percent of the overall investments. And with fractional ownership now available in India, investors can explore this asset with a corpus of as low as Rs 25 lakh.

The investors seem to agree because according to the YouGov’s Diwali Spending Index 2021, about 35 percent of urban Indians aged between 25 and 44 plan to invest in real estate over the next six months. However, investments need to be made in portfolios that offer consistent profitability. There are multiple factors investors need to evaluate; volatility, price swings, volume, etc., before making a purchase decision. Investors should consult their advisors and understand the risks involved while still opting for Grade-A, high-quality CRE assets.

Pre-IPO Markets: While the festive season is in full swing, so is the IPO rally. Indian startups raised $12.1 billion in the first half of this year and India has been home to 24 unicorns in 2021 so far. These investments have led to immense growth in the last mile reach for Indian users. However, due to multiple funding rounds before these startups hit the public market, these startups can often not offer enough room for growth. With at least three to four rounds of funding followed by a public IPO among multiple classes of investors, the value that the investor can get decreases after a point.

Investors can approach this form of investing (early age companies) by exploring Pre-IPO shares of top startups. In this way, Indians can get early access to early-age startups before they hit the larger market. It is imperative to understand that this would carry different risks from that of investing in IPOs and investors must study every opportunity before investing their hard-earned money in it.

Digital gold: Unlike Diwali 2020, gold will see higher demand with gold imports already reaching 740 tonnes till September this year. With an increased consumer spending sentiment and lesser restrictions on movement, Diwali will see more investors buying gold owing to its auspicious significance and the hedge against inflation. However, if investors wish to allocate some part of their portfolio to gold, they can consider exploring digital gold in the forms of ETFs and sovereign bonds. Physical gold depreciates in value while also incurring storage costs and jewellery-making charges.

Also, sovereign bonds and ETFs can be explored depending on the liquidity needs of the investor. While sovereign bonds have a lock-in period, ETFs can be traded on the exchange and can be chosen accordingly.

Every investment asset comes with its own risks and disclaimers. Commercial real estate is a very lucrative asset for long-term investment, with the right partner who can manage the property and provide a transparent interface for the user. Pre-IPO is a rising alternative asset class but given its novelty, choosing a secure partner and a good company to invest in would need an expert’s eye. Gold, traditional and safe, can be a part of the portfolio but should be chosen with the larger diversification agenda in mind.

With these in mind, Indian investors can make the most of this auspicious Muharat by investing in instruments that create wealth for tomorrow!

The author, Aryaman Vir, is Founder and CEO at MYRE Capital. The views expressed are personal

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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

Dhanteras 2021: Options to consider for gold investment this Diwali

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

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Gold-buying is considered auspicious on Dhanteras, the first day of the Diwali festival. It is an age-old tradition among Indian households, serving as both an indulgence and investment.

One can either choose to invest in physical gold or opt for an investment through paper/electronic form. While physical gold involves investing in bullion gold, like bars, coins, or jewellery, the value of which is determined by the actual gold content, digital gold is a way of investing without concerns of purity, making charges, and storage.

Here’s a list options for gold investment that investors might want to consider this Diwali:

Physical gold

Physical gold is one of the most sought-after options during auspicious occasions. It doesn’t require a demat account, has minimal paperwork, and doesn’t incur additional charges except for GST, but purity, safety, and storage are key concerns.

The different forms of physical gold are jewellery, bars and coins.

Sovereign Gold Bonds (SGBs)

A safe way to invest in gold is Sovereign Gold Bonds (SGBs) especially for those with a long investment window of 5-8 years. The Reserve Bank of India (RBI) issues SGBs multiple times in a year and fixes a price for each issuance. Users can also buy or sell SGBs in the secondary market.

Redemption is possible after five years from the date of issuance. The bond will be tradable on stock exchanges if held in demat form and can also be transferred to any other eligible investor. In addition to capital appreciation, investors are paid 2.5 percent guaranteed interest on an annual basis.

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Gold ETFs

Investors looking for a more liquid option can consider gold ETFs, experts say. Gold ETFs allow individuals to invest in gold in a dematerialised format, which can be bought and sold on the stock exchange just like shares.

Gold equivalent to physical quantity is deposited in an electronic form, in the purchaser’s demat account. These qualify for long-term capital gains if held for a year or more. The minimum investment in gold ETF is 1 unit (equivalent to 1 gram) and involves brokerage or commission charges of 0.5 to 1 percent.

Gold mutual funds

Gold mutual funds are open-ended funds that invest in gold ETFs or in shares of gold mining companies. Regulated by Sebi, an investor can invest as low as Rs 500 (through a systematic investment plan) or any amount greater than Rs 5,000 as lumpsum.

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

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

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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

Dhanteras 2021: Here’s why you should invest in gold this Diwali

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

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Gold buying is considered opportune during Dhanteras – the first day of the Diwali festival. Purchasing and gifting the yellow metal during the festival is common across ages and income groups, often leading to gold demand reaching its annual peak around this time.

Investors also believe that gold purchase brings financial security to their portfolio.

For investors looking to buy gold this festival season, Renisha Chainani, Head of Research, Augmont said it is an apt time.

“Gold outlook is positive going forward and is expected to touch record high soon, as its mainly dependent on three things -inflation, economic outlook and demand,” Chainani said in an exclusive interaction with CNBC-TV18.

Firstly, she said worldwide inflation has soared to multi-year highs this year and will continue to do so for years to come.

“Inflation in the United Kingdom is at a nine-year high, while inflation in the US and Eurozone is at a thirteen-year high, and energy prices are also at a thirteen-year high. Inflationary signs are becoming more visible by the day, ranging from rising transportation costs, rising energy bills, rising food and general commodity prices, to product and labour shortages,” she said.

Secondly, she added that large national debts incurred during the COVID-19 pandemic must now be repaid, and any government’s strategy will include devaluing its currency through inflation.

“The economic situation is dire, and national economies are in bad health, yet the investment community does not appear to be aware of this,” she said.

“Thirdly, retail demand for gold jewellery, bars and coins is very robust in emerging countries due to festive seasons and pent-up demand for the next 5-6 months,” Chainani said.

However, due to the ongoing concerns regarding the COVID-19 pandemic, visiting jewellery shops can still be challenging especially given the crowds that gather during festivals. Hence, digital gold is finding favour in India.

In the words of Ashraf Rizvi, founder and CEO, Gilded, “Digital gold is a great purchase during Diwali as it not only offers all the benefits of physical gold but also removes the hassles that accompany physical gold purchase. With digital gold, investors no longer need to worry about storage, safety and transportation. Additionally, there are no added insurance costs and making charges attached to digital gold, providing buyers with savings.”

Indians can conveniently buy and gift digital gold through a mobile app where the purchased gold is accessible 24×7. As little as a gram of gold can be bought, fitting into everyone’s Diwali gifting, which is a key advantage, Rizvi told CNBC-TV18.

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

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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

Gold price today: Yellow metal trades flat; support seen at Rs 46,800 per 10 grams

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

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Gold prices in India traded flat on the Multi Commodity Exchange (MCX) Wednesday amid gains in the international market as the dollar remained barely off its three-week lows ahead of key US data. Weakness in the greenback makes the precious metals more attractive for holders of other currencies.

At 9:34 am, MCX gold futures for October delivery traded 0.05 percent higher at Rs 47,144  per 10 grams. Silver futures for September delivery were up 0.13 percent at Rs 62,999 per kilogram.

Globally, spot gold was steady at $1,813.93 per ounce while US gold futures were down 0.2 percent at $1,815.10 an ounce.

Investors awaited a US jobs report for clues on when the Federal Reserve might start reducing its pandemic-era stimulus measures. Gold is considered a hedge against inflation and currency debasement, which can be caused by massive stimulus measures.

The dollar index — which gauges the greenback against six currencies — edged up 0.1 percent, having hit a more than three-week low on Tuesday.

Manoj Kumar Jain, Director-Head of Commodity Research, Prithvi Finmart, said he expects gold prices to remain volatile on Wednesday ahead of the US non-farm data. He pegged support for spot gold at at $1804-1,792 per troy ounce, and resistance at $1,830-1,844 per ounce.

On MCX, Jain suggests buying silver around Rs 63,000 for a target of Rs 63,800 with a stop loss at Rs 62,600.

Gold finds support at Rs 46,920-46,770 and faces resistance at Rs 47,330-47,550, he said. For the white metal, he has pegged support at Rs 62,900-62,500 and resistance at Rs 63,700-64,100 levels.

Gains in the domestic equity market limited the upside for the precious metals. Strength in shares boosts the risk appetite of investors, shifting them away from safety bets such as gold.

“Gold and silver are showing strength in the daily chart and Momentum indicator RSI also giving the positive signal. Gold is showing more strength in comparison to silver. So traders are advised to create fresh buy positions in gold and silver near given support levels,,” said Amit Khare, AVP- Research Commodities, Ganganagar Commodities.

He added that traders should also focus on important technical levels for the day:

October Gold: Support 1 – Rs 46,800, Support 2 – Rs 46,500; Resistance 1 – Rs 47.450, Resistance 2 – Rs 47,750.

December Silver: Support 1 – Rs 62,700, Support 2 – Rs 62,100; Resistance 1 – Rs 64,000, Resistance 2 – Rs 64,600.

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

Here’s why Mark Mobius suggests investors to have 10% portfolio in gold

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

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Have you been investing in gold for long? If not, it may be time for you to start doing it now.

According to veteran investor Mark Mobius, investors should hold at least 10 percent of gold in their portfolio as currencies may be devalued “significantly” in the near future.

Countries around the world are rolling out “unprecedented” stimulus packages to mitigate the impact of the COVID-19 pandemic. Mobius says this is likely to lead to devalued currencies.

“Currency devaluation globally is going to be quite significant next year given the incredible amount of money supply that has been printed,” he told Bloomberg in an interview on August 30.

Devaluation, as we know, refers to the practice of reducing the value of a particular currency compared to any goods it can be exchanged with. With this, there is a surplus of gold in the market and the prices also start climbing.

It’s important to note here that Mobius’ remarks come at a time when gold is already trading higher in India and as well as globally.

At 10:20 am, gold futures for October delivery rose 0.23 percent to Rs 47,274 per 10 grams as against the previous close of Rs 47,164 and the opening price of Rs 47,299 on the MCX. Meanwhile, international gold prices gained propped up by a sluggish dollar. Spot gold rose 0.3 percent to $1,815.16 per ounce. US gold futures were up 0.3 percent at $1,817.40.

At a time when gold is trading above $1,800 per ounce, Chirag Sheth of Metals Focus told CNBC-TV18 even if tapering happens, interest rates are unlikely to hike until late 2022 or early 2023. That is something that is supportive of gold, he said citing US Fed chief Jerome Powell’s speech last week in which he said tapering is not equivalent to an interest rate hike.

On the back of correction in Indian markets that has helped improve demand, Sheth expects gold to hit $1900 per ounce in the international markets by early next year.

Investors tend to hold gold during periods of heightened risk as the yellow metal prices often rally during periods of uncertainty or market stress, similar to what happened in 2020.

Mobius, who has over 30 years of experience at Franklin Templeton Investments, told Bloomberg, “It is going to be very, very good to have physical gold that you can access immediately without the danger of the government confiscating all the gold.”

Earlier in 2020, the gold rates had touched record highs above $2,075 an ounce in early August following an unprecedented global stimulus, negative real rates, and a weakening dollar. In India, gold prices had breached Rs 56,000 in August last year. Gold prices then eased from the highs reached in August 2020 on a stronger US dollar and expectations of economic recovery.

Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

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

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Gold rate today: Yellow metal price tops Rs 47,400 mark; next hurdle seen at Rs 47,380

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

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Gold and silver prices in India moved higher in early deals on Friday, tracking mild gains in the global benchmarks as investors awaited Federal Reserve Chairman Jerome Powell’s speech later in the day at the Jackson Hole symposium. The dollar edged lower against a basket of currencies. Weakness in the greenback makes gold more attractive for holders of other currencies.

At 9:05 am, MCX gold futures for October delivery traded higher by Rs 194 or 0.41 percent at Rs 47,431 per 10 grams. Silver futures were at Rs 62,950 per kilogram, up by Rs 227 or 0.36 percent compared to the previous day. On Thursday, gold and silver futures had eased to settle at Rs 47,237 and Rs 62,723 per kg respectively.

Also read: Is it good time to buy gold? | Should you switch to gold as equities soar to highs?

International gold prices were steady on Friday, with spot gold last seen trading up 0.1 percent at $1,793.68 per ounce. US gold futures traded 0.1 percent higher at $1,796.70 per ounce. Silver rose 0.33 percent to $23.63 per ounce.

The dollar held firm after bouncing off a one-week low in the previous session. The dollar index — which measures strength in the greenback against six other currencies — declined  as much as 0.05 percent.

On Thursday, Federal Reserve’s hawkish policymakers urged the central bank to begin paring bond purchases they feel have become ineffective, if not downright harmful.

Caution also set in the market following Islamic State’s suicide bomb attack on Thursday at Kabul airport, that killed scores of civilians and at least 13 US troops, according to a report by news agency Reuters.

Also read: Gold ETF outflow at Rs 61 crore in July

Many analysts expect bullion prices to remain volatile this week.

According to Manoj Kumar Jain, Director-Head of Commodity Research, Prithvi Finmart: “Gold prices caught some safe-haven buying at lower levels after the attack on the Kabul airport… Global equities slipped after this and supported gold prices. Gold prices also get support from the rise in unemployment claims in the US last week.”

He expects both precious metals to remain volatile on Friday ahead of the Fed Chair’s speech at the Jackson Hole symposium.

“His remarks on the US economy, bond tapering and interest rates will give further direction to the precious metals,” said Jain, who recommends buying gold on dips to around Rs 47,000 for a target of Rs 47,500 with a stop loss at Rs 46,770.

He has pegged support for the yellow metal futures on MCX at Rs 47,050-46,880, and resistance at Rs 47,380-47,600.

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As equities soar to screaming highs, is it time to turn to gold?

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

Listen to the Article (6 Minutes)

Dalal Street is showing no signs of fatigue, at least for now. But does that mean it’s a good time to think about adding some sheen to your portfolio?

Wealth managers often recommend allocating some portion to gold among asset classes, usually 10-15 percent. Some even say it’s never a bad time to keep the yellow metal in one’s investment kitty up to a certain threshold.

But does that work even if equity valuations look stretched?

“Gold is a good asset to add in a staggered manner over the next six months. Equity valuations are running high and inflation is picking up globally. This is usually a good scenario for gold,” Sandip Sabharwal, an independent adviser and market expert, told CNBCTV18.com.

Covid waves have impacted the economy but not asset prices as such, and that’s why making a prediction based on a third wave “which might or might not happen makes no sense at this stage”, he said.

“The greater relevance is of the timing of extreme monetary stimulus withdrawal by central banks which should start over the next six months,” Sabharwal said in an email response.

Typically, gold and equities are believed to share an inverse relationship.

In the last one year, the S&P BSE Sensex index has returned 44 percent, which is in sheer contrast to a 13 percent drop in the price of gold.

Even in a little more than seven months of the current calendar year, the 30-scrip equity benchmark is up 14 percent whereas the yellow metal is down 8.5 percent.

MCX gold futures have dropped 11 percent in the past one year, losing sheen since scaling an all-time peak in August last year.

Is it time to turn to gold now?

There is no good or bad time to invest in gold. That’s the message from Ravindra Rao of Kotak Securities. “…especially in the current uncertain scenario where inflation is moving higher with interest rates at lows,” he said.

“Although gold has taken a pause in 2021 after a rally in 2020 to all-time highs (MCX gold hit a record high in August 2020), the current environment of low interest rates coupled with higher inflation is the perfect scenario to stay diversified with some part of the portfolio into gold,” according to Rao, CMT, EPAT, VP-Head Commodity Research at Kotak Securities.

The dollar has reversed some of its losses on hopes that the Federal Reserve might start tapering of bond purchases sooner than expected earlier.

However, the US central bank’s dovish tone recently, in view of the rise of the Delta variant of Covid-19 and mixed macroeconomic data, has led many into believing that rate hikes in the US may not happen anytime soon.

According to Rao, this is a perfect setup for gold. “We don’t expect the Fed to change stance until inflation rises beyond control or US economic numbers show a sustained improvement.”

Rao sees MCX gold probably moving above the Rs 50,000/10 grams mark by the end of the year, averaging around Rs.49,500.

Meanwhile, analysts say Indian equities are currently supported by positive macroeconomic factors, including earnings optimism, record GST collections, a drop in oil rates from highs and a rise in exports.

Others are more skeptical about the precious metal at the current juncture.

Gold is stuck in a tight range for last few weeks. “We expect it to break the upper range soon on rising Covid-19 cases in the US and China,” said Manoj Kumar Jain, Director-Head of Commodity Research at Prithvi Finmart.

The way forward

Gold may be choppy with mild upside potential in the very near term, Hareesh V Nair, Research Head-Commodities, Geojit Financial Services, told CNBCTV18.com. “I don’t expect it can break its previous high due to negative fundamentals,” said Nair, who is “slightly bearish on gold for the medium to long term.”

The $1,960-2,000 per ounce region (spot gold) may act as stiff resistance, while strong support is placed at $1,645, he said.

There are chances of a breakout if global economic conditions worsen or any key policy changes come about from the US central bank. “Otherwise, I doubt,” he added.

Near-term view

Gold has support at $1,788 and faces resistance at $1,834, but downbeat Chinese factory activity and lower-than-expected US manufacturing reading could lend it some support, according to Jain.

He expects gold to continue to hold $1,788 (Rs 47,350 per 10 grams on MCX) and test the $1,850-1,866 (Rs 48,800-49,000) levels this month.

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