Tag: Gold Prices

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.

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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.

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Gold market flourishes in 10-20 gram range, 2-5 gram segment faces challenges this Akshaya Tritiya

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

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This year has been a volatile one for gold and diamond. Geopolitical concerns and inflation have been some of the key triggers in the market. According to World Gold Council, in first quarter of 2024, India’s total gold demand, including both jewellery and investment, increased to 136.6 tonne, hinting at revival in gold demand.

In anticipation of this auspicious occasion, jewellers are expressing optimism, buoyed by positive indicators on the ground. Speaking to CNBC-TV18, Sachin Jain, Head of India at the World Gold Council, highlighted the remarkable comeback of gold, citing increased foot traffic and bookings across various cities.

Jain added, “While we were preparing on the floors over the last quarter, there was anticipation that with the increased price perhaps only the very low end goods or lighter goods might sell. What ironically we have seen is that a lot of wedding based buying which had to happen this year that segment has really, really propelled. They are completing the buying with the anticipation that the gold price might further go up through the year.”

Jain noted that there has been strong performance in the 10 to 20 gram range. However, he emphasised that the lower end, particularly in the 2 to 5 gram range, has experienced a significant impact.

Read Here | Gold prices near ₹72,000 per 10 grams on Akshaya Tritiya day: Will high rates deter demand?

Suvankar Sen, MD & CEO of Senco Gold & Diamonds, anticipates a modest growth in value compared to the previous year, attributing this optimism to the timing of Akshaya Tritiya aligning with the beginning of May, coinciding with increased disposable incomes for many consumers.

However, Sen acknowledges the challenges posed by soaring gold prices and external factors such as regional elections and adverse weather conditions impacting rural markets.

Dileep Narayanan, Head of Bullion & Treasury at Malabar Group, underscores the enduring significance of auspicious occasions like Akshaya Tritiya in driving gold purchases. Narayanan highlights a consistent demand for gold jewellery alongside investments in gold bars and coins during such propitious moments, underscoring the cultural and financial significance attached to these purchases.

Talking about gold ETFs, Vikram Dhawan, Head-Commodities & Fund Manager, Nippon India Mutual Fund stressed the need for policy reforms, mindset shifts, and regulatory changes to encourage greater adoption of gold ETFs, advocating for the financialization of gold assets. He reasoned that investing in gold ETFs offers a more practical alternative to storing physical gold, aligning with the objectives of wealth creation through capital markets.

Watch this video for more.

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This brokerage advises investors to buy gold in SIP mode during every dip

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

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As gold prices continue their upward trajectory, Religare Broking suggested that investors could seize the opportunity to accumulate gold through systematic investment plans (SIPs), particularly during market dips.

The brokerage advised investors to consider initiating SIPs as long as gold prices maintain above ₹68,500 per 10 grams.

Religare has set an initial upside target of ₹74,000 per 10 grams, followed by ₹78,000 per 10 grams levels. However, the brokerage warns that a decisive break below the previous swing low of ₹65,200 per 10 grams could disrupt the trend.

“This could potentially lead gold to retest the range of ₹63,300 to ₹63,800 per 10 grams,” Religare Brokerage said.

The recommendation comes against the backdrop of rising gold rates, with the precious metal seeing gains of approximately 15% in domestic bourses in 2023. The market dynamics driving this surge include a blend of geopolitical tensions, central bank manoeuvres, fluctuations in the dollar index, and shifts in US yields.

MCX gold surged by 12.50% in the past calendar year, slightly outpacing spot Comex gold, which stood at 12.20%.

Notably, central banks worldwide have increased their gold purchases, acquiring 1,037 tonnes in 2023, falling just shy of the record set in 2022, which stood at 1,082 tonnes.

Religare Broking pointed out that following a robust performance last year, gold has registered an approximate 12.50% gain on domestic exchanges thus far. Analysing the daily chart, prices are currently consolidating after a sharp rise, with ₹70,000 per 10 grams acting as a pivotal level.

Although buyers are cautious during this consolidation phase, Religare Broking has suggested that a slight dip towards the 50 SMA at ₹68,500 per 10 grams could present a favourable buying opportunity for the next leg of upward momentum.

On May 10 (Friday), Akshaya Tritiya day, gold prices increased, fuelled by weak US jobs data and a falling dollar. At the MCX, prices soared over ₹1,000 to reach ₹72,700 per 10 grams.

This surge follows a ₹2,700 per 10 grams rise within a week.

Comex Gold saw a rise of more than $28 at $2,375 per ounce, marking a strong move of $75 per ounce in one week, according to Jateen Trivedi, VP Research Analyst — Commodity and Currency at LKP Securities.

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Gold buying this Akshaya Tritiya: How to check if your jewellery is genuine?

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

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While buying gold is considered highly auspicious during Akshaya Tritiya, it’s no secret that some jewellers find a way to sell yellow metal with less than claimed karats. Some jewellers may use deceptive tactics to try and sell gold jewellery claiming it is pure 22 karat gold, when in reality, its purity might fall short.

To shield oneself from such fraudulent practices, it’s important to identify the genuine hallmarking signs.

Also, one should check the karat in the jeweller’s karat meter machine.

To shield oneself from potential fraudulent practices, it’s essential to familiarise oneself with the hallmarks of authentic gold:

HUID Number

The six-digit alpha-numeric code, known as the HUID number, serves as a unique identifier for each gold article.

Regulatory changes now mandate a six-digit HUID, enhancing traceability and transparency in the gold supply chain.

Utilising the BIS Care App’s ‘Verify HUID’ feature enables buyers to confirm the authenticity of their purchase swiftly.

BIS Mark

Look for the Bureau of Indian Standards (BIS) mark, symbolised by a triangle, which is a hallmark of purity and authenticity.

This mark serves as a reliable indicator of the gold jewellery’s purity, instilling confidence in the buyer.

Detailed bill breakup

Request a comprehensive bill breakup and cross-verify hallmarking costs with those set by Assay and Hallmarking Centres (AHCs).

Any inconsistencies in pricing should be thoroughly examined to ensure transparency in the transaction.

Valid store address

Verify the store address against BIS guidelines to reaffirm the legitimacy of the purchase. Ensuring that the store adheres to regulatory standards further reinforces the authenticity of the transaction.

Understanding gold hallmarking

Gold hallmarking is a system that certifies the purity of gold in jewellery and other products. It serves as a guarantee of purity and fineness and safeguards the public against adulteration.

Registered jewellers under the BIS hallmarking scheme are required to have their jewellery tested for purity, ensuring a high level of reliability and standardisation. Mandatory hallmarking is a significant step towards organising the jewellery industry and ensuring that customers receive what they pay for.

ALSO READ | Gold prices near ₹72,000 per 10 grams on Akshaya Tritiya day: Will high rates deter demand?

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Gold prices near ₹72,000 per 10 grams on Akshaya Tritiya day: Will high rates deter demand?

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

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Gold prices soared on the Multi Commodity Exchange (MCX) on the day of Akshaya Tritiya, an occasion when buying the yellow metal is considered auspicious. On Friday, May 10, 2024, gold futures maturing on June 5, 2024, reached ₹72,094 per 10 grams on the MCX.

This was ₹455 or 0.64% up from the previous close at ₹71,639 per 10 grams.

The surge in gold prices isn’t confined to domestic markets alone; globally, gold prices also witnessed an upward trend.

Spot gold climbed 0.2% to $2,350.87 per ounce by 0212 GMT, buoyed by recent economic data hinting at a potential interest rate cut from the Federal Reserve.

This momentum propelled gold towards its best week since April 5, with prices up by 2.2% so far this week, according to news agency Reuters.

US futures mirrored this trajectory, rising 0.7% to $2,356.90.

Tapan Patel, Fund Manager-Commodities at Tata Asset Management, suggests that the current market landscape, coupled with the auspicious day of Akshaya Tritiya, presents a favourable environment for gold investment.

Factors such as central bank gold purchases, expectations of interest rate cuts, and geopolitical risks contribute to the bullish sentiment surrounding gold prices.

Patel advises investors to consider allocating around 8-10% of their total portfolio exposure to gold as a strategic move for asset diversification.

Recognizing gold’s role as a diversification tool, hedge against inflation, and long-term store of value, Kavitha Subramanian, Co-founder of Upstox outlines various investment vehicles available to investors except from physical gold:

Sovereign Gold Bonds (SGBs)

Backed by the RBI and the GOI, SGBs offer a secure alternative to physical gold, with an assured interest rate of 2.5% annually and tax-free profits on maturity.

Gold ETFs

These instruments provide a convenient and cost-effective means of investing in gold, suitable for investors seeking exposure to gold without the burden of physical ownership.

Gold Mutual Funds

Managed by professionals, gold mutual funds invest in physical gold, Gold ETFs, or gold mining company stocks, catering to diverse investor preferences.

Asset management companies (AMCs) are increasingly offering innovative avenues for gold investment, ranging from hybrid multi-asset schemes to exchange-traded commodity derivatives (ETCD).

Subramanian recommends allocating approximately 5% to 10% of one’s portfolio towards gold to optimise diversification and manage risk effectively.

Gold sales on Akshaya Tritiya day

Colin Shah, MD at Kama Jewelry, said that a twofold momentum surge is expected this year during Akshaya Tritiya.

He attributed it to the sentimental value attached to gold and the auspicious timing for investments.

According to Piyush Gupta, Director at PP Jewellers by Pawan Gupta, gold sales may range between 10-15% this year.

“Even if gold prices this year may be increasing at a fast pace, it’s important to see the bright side of things. It is also important to understand that the rise in prices reflects not only market conditions but also the true worth of gold as a tangible asset with enduring value,” he said.

Harshal Barot, Senior Consultant for South Asia and the Middle East at Metals Focus expects gold sales volumes to be 10-20% lower this Akshaya Tritiya compared to last year.

However, in terms of value, he said that sales will remain comparable.

Barot said prices have cooled off from record highs, boosting sentiment in the run-up to Akshaya Tritiya.

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Gold prices up 13% since last Akshaya Tritiya: Should you buy amid rising rates?

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

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Gold prices have surged by approximately 13% since the last Akshaya Tritiya, experts told CNBC-TV18.com. With gold prices hovering around ₹70,000 per 10 grams in India, there arises a pertinent question: Will consumers buy gold this Akshaya Tritiya amidst these elevated rates?

Commenting on the same, Colin Shah, MD at Kama Jewelry, said that a twofold momentum surge is expected this year during Akshaya Tritiya.

He attributed it to the sentimental value attached to gold and the auspicious timing for investments.

Shah noted a shift among young buyers, who are increasingly investing in gold for adornment purposes.

In the long-term too, experts are bullish on gold prices as well as investment.

Aditya Agarwala, Co-Founder and Head of Research and Investment at Invest4edu, said  he can see gold moving north after a cool-off period.

Here are the key factors that are expected to sustain the demand for precious metals (as highlighted by Agarwala):

Geopolitical tension

Constant conflicts in the Middle East and European countries will keep gold prices at elevated levels as it is considered as a safe haven.

Slowdown in global economies

A weaker global economy and sticky inflation will further boost demand for gold.

Higher interest rates

If interest rates cuts are lower than expected due to high inflation, money will flow into gold and silver from equites.

The table below shows the average annual price of gold (24 karat per 10 grams) in India from 2014 to the present year offering insight into historical trends:

(Source: Invest4edu)

Investment considerations

Experts think investing in gold is a smart choice now.

“Investing in gold brings stability and good returns amidst risks. While Indian stocks are booming, they come with uncertainty. To protect against rising prices, gold is a smart choice. On Akshay Tritiya, a lucky day for gold buying, consider investing in gold. Despite recent ups and downs, gold keeps hitting new highs, showing it’s a safe bet in today’s market,” Kresha Gupta, Founder, Chanakya Opportunities Fund, told CNBC-TV18.com.

Brokerage firm Motilal Oswal also advocates a positive outlook for the yellow metal.

It recommends purchasing the metals on dips with targets set at ₹75,000 per 10 grams for gold on the domestic front, and $2,450 per ounce on Comex.
In the longer term.

In addition to traditional gold purchases, digital gold options like gold ETFs are gaining traction.

Zerodha Fund House cited significant increases in gold ETF inflows post-pandemic.

Analysis reveals a rise in assets under management (AUM) of gold ETFs, indicating growing investor interest in this avenue.

Motilal Oswal recommends investing in sovereign gold bonds (SGBs) to capitalise on gold price rises, with the added benefit of a 2.5% interest rate.

Gold demand this Akshaya Tritiya

According to Piyush Gupta, Director at PP Jewellers by Pawan Gupta, gold sales may range between 10-15% this year.

“In India, gold is not just an investment but a testament to our cultural legacy. It has always symbolised prosperity and tradition. Even if gold prices this year may be increasing at a fast pace, it’s important to see the bright side of things. It is also important to understand that the rise in prices reflects not only market conditions but also the true worth of gold as a tangible asset with enduring value,” he said.

Vikas Singh, Managing Director & CEO of MMTC-PAMP, recommends investors to check for purity before buying gold.

“The higher the purity, the greater the intrinsic worth and value for potential returns. While karats indicate gold content broadly, the fineness measure provides a more granular analysis. Crucially, for the discerning investor, purities can vary even within the 24-karat category,” he said.

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

Akshaya Tritiya gold sales: Expert expects volumes to be 10-20% lower this year

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

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Harshal Barot, Senior Consultant for South Asia and the Middle East at Metals Focus, expects gold sales volumes to be 10-20% lower this Akshaya Tritiya compared to last year. However, in terms of value, sales will remain comparable.

“We have done this estimate quite some time back and anywhere between 15 to 20 tonnes of gold is sold around Akshaya Tritiya, not on the specific day itself so this is our estimate. We could be looking at anywhere between 10 to 20% lower in volume terms this year. Value terms, you might still be there in there about compared to last year.”

During Akshaya Tritiya last year, gold price stood at ₹60,000 per 10 grams. The price has risen nearly ₹10,000 since and now stands at around ₹70,000 per 10 grams.

The rise in domestic market prices is attributed partly to duty hikes over the years, and rupee depreciation.

However, Barot said prices have cooled off from record highs, boosting sentiment in the run-up to Akshaya Tritiya.

Barot is also optimistic about the long-term prospects of silver despite its delayed response to the gold price rally.

Barot advises investors to consider buying silver on price dips as it tends to catch up with gold’s performance.

Read Here | Akshaya Tritiya 2024: Digital alternatives to buying gold

Barot highlighted the shift away from preference for physical gold and silver bars and coins in jewellery stores.

Retailers are less inclined to promote bars and coins due to lower making charges and the potential to cannibalise jewellery sales.

Instead, these products are increasingly sold directly by refiners, with a growing presence in online platforms and digital mediums.

He also pointed out a notable interest in gold as an investment option beyond traditional jewellery purchases as seen in the success of sovereign gold bonds and exchange traded funds.

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