Tag: gold

Gold hits near one-week high on weak dollar, geopolitics

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

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Gold prices hit the highest in nearly a week on Tuesday as the dollar weakened and as investors awaited potential US action against the suspected use of chemical weapons in Syria.

“Geopolitics is taking the main driving seat this week, so gold has potentially got some room for the upside,” said Jonathan Butler, commodities analyst at Mitsubishi in London.

“A lot will hinge on what is happening geopolitically between Russia, Syria, Iran and all sorts of other countries that could be potentially drawn into this.”

Spot gold was up 0.3% at $1,340 an ounce at 1410 GMT, the highest since April 4.

US gold futures added 0.2% to $1,343.20 an ounce.

If gold breaks through resistance of $1,340, it could move back to the late March highs just under $1,360, Butler added.

Trump on Monday promised quick, forceful action in response to a deadly suspected chemical weapons attack in Syria, appearing to suggest a potential military response.

Gold is often seen as an alternative investment during times of political and financial uncertainty.

Gold also got a boost as the dollar index dipped to a two-week low against a basket of currencies on Tuesday after Chinese President Xi Jinping’s promise to cut import tariffs eased concerns about a trade conflict.

Xi promised to open the country’s economy further and lower import tariffs on products including cars. His comments spurred a rally in global equity markets.

Markets are looking ahead to this week’s Federal Reserve’s minutes on its last policy meeting and US CPI data for cues on the pace of interest rate hikes this year.

In other precious metals, silver gained 0.8% to $16.58 an ounce.

Platinum fell 0.5% to $927.25 an ounce, after gaining about 2% in the previous session, the most in nearly two months.

Palladium rose 2.2% to $950 an ounce. The auto catalyst metal gained over 3 percent on Monday, its biggest daily percentage rise since January 12.

Platinum fell back to a discount to sister metal palladium on Tuesday after rising to a premium last Thursday. Last September, palladium gained the upper hand over platinum for the first time in 16 years.

“We are not convinced the platinum-palladium ratio can hold consistently above parity this year as strong trends in the auto sector which have weighed on the ratio remain in place,” UBS analyst Joni Teves said in a note.

Diesel vehicles use mostly platinum in catalytic converters while petrol cars largely use palladium, but diesel sales in Europe’s largest car markets have been falling.

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

Gold eases on receding fears over US-China trade war

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

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Gold retreated on Monday, erasing the previous session’s slim gains as fading concern over potential escalation in the trade stand-off between China and the United States sparked a recovery in cyclical assets such as stocks at bullion’s expense.

Gold rose half a percent on Friday as simmering worries over trade friction and softer than expected US payrolls data for March knocked equities and the dollar lower. However, it has struggled to maintain those gains.

Spot gold was down 0.3% at $1,328.31 an ounce by 1145 GMT, while US gold futures for June delivery fell by $4.20 to $1,331.90.

“Holdings of physically backed gold products have been creeping up slowly, but not to the extent that you’d expect if a trade war was on the verge of breaking loose,” said Julius Baer analyst Carsten Menke.

“This is reflected in the gold market overall at this point in time. In the end, everybody knows a trade war will only bring losers and no winners, and this is what will eventually prevail when they sit together and negotiate the issues.”

Global equities rose and the dollar steadied on Monday as the US government played down fears of a trade war with China.

US President Donald Trump predicted on Sunday that China would take down its trade barriers, expressing optimism despite escalating tensions between the nations.

Trump late on Thursday threatened to slap $100 billion more in tariffs on Chinese imports, while Beijing said it was fully prepared to respond with a “fierce counter strike”.

Hedge funds and money managers cut their net long position in COMEX gold in the week to April 3 and boosted their net short position in silver to another record, U.S. Commodity Futures Trading Commission data showed on Friday.

Silver was flat at $16.35 an ounce, while platinum gained 0.3% to $917.90.

Palladium, which as a component in auto catalysts is the most industrial of the major precious metals, was up 2.8% at $925.97 an ounce, in line with a bounce in other cyclical assets.

The metal had fallen for the past 11 sessions, hitting its lowest since mid-August at $895.47 on Friday. It is now down more than a fifth from the record high reached in January.

“The near 20% correction in palladium prices signals a possible bear market,” Scotia Mocatta said in a monthly note.

The correction is not surprising given the sharp price gains of recent years, it said, but added: “Palladium’s strong fundamentals remain in place, so we would expect dip-buying before too long.”

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

Commodity Corner: Gold prices under pressure

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

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Commodity Corner by Manisha Gupta guides you through the most important trades in commodities, takes a first-hand look at how these markets are moving and what is at stake for investors.

Crude oil prices have seen some strength come back. Prices had seen 2 percent decline on Friday and the previous week closed 4.5 percent on the lower side. However, there is some buying support seen in the Asian markets on the back of weakening of US dollar, decline in US inventory, and a bit of risk appetite that has come back in the global equity market.

On the precious metals side, gold prices have been under pressure, but there is good buying coming for silver prices.

Metals as a space has also been quite volatile. Iron ore prices in Shanghai have declined to a 10 week low and that has pulled the zinc and nickel prices on the weaker side.

Aluminum is seeing a bit of green after US proposed sanctions against some Russian businessmen and companies which includes Rusal Aluminum.

Check out trading strategies from Angel Commodities.

• Silver is a buy at Rs 37,700-37,800 with target of Rs 38,700 and stop loss of Rs 37,400.
• Copper is a buy at around Rs 434-435 with a target of Rs 442 and stop loss of Rs 432.

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

Don’t witch-hunt the RBI

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

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The questioning on the Nirav Modi issue has now reached a few current and one former Reserve Bank of India (RBI) deputy governor.

At the outset, one needs to distinguish between the Nirav Modi issue and the 80:20 gold scheme.

Nirav Modi, in cahoots with a couple of employees of Punjab National Bank’s (PNB) Brady House branch, took large amounts of loans without margins; loans which, it now appears, he could repay only by taking more loans.

His uncle, Mehul Choksi, appears to have benefited by changing a decimal point in one of his loans, and making off with a much larger loan than was sanctioned.

Nirav Modi is not at all connected to the 80:20 scheme. Mehul Choksi’s Gitanjali Gems was one of the Star Trading Houses (STH) that got a licence to import gold in May 2014, when gold was scarce in the country.

However, it is now well documented that of the 14 STHs, Gitanjali imported the least, and hence probably benefitted the least.

The questioning of the current and former officials of the RBI is hence in connection with the 80:20 scheme.

The question marks over this scheme emanate from both the timing of the relaxation and the Comptroller and Auditor General’s (CAG) remark that the STHs benefitted by Rs 4,500 crore because of the policy.

What the Central Bureau of Investigation (CBI) and other investigating agencies need to note, is that policies intended for general benefit often tend to help some more than others.

A policy to build, say the golden quadrilateral, pushes up prices of land in areas through which the road runs.

But the policy was not intended to benefit those owning the land. It was meant for the entire nation. One ought to see the 80:20 policy in this light.

When the taper talk hit the Indian rupee in July 2013 along with the other four “fragile” currencies, RBI’s and the government’s effort was to control imports and increase the flow of dollars into the country.

The FCNR (B) scheme was designed to attract Non-resident Indians (NRI) into depositing more dollars in Indian banks, with the RBI agreeing to bear the swap cost.

A number of NRIs made money hand-over-fist by leveraging nearly 20 times to benefit from the FCNR scheme. India got over $25 billion due to this scheme.

When the time came for the deposits to mature (in October-November 2016) the dollar had become cheaper, so the RBI didn’t lose any money buying back the dollars and repaying the NRIs.

But that’s beside the point. In the pursuit of more dollar inflows, so that the rupee didn’t look fragile, the government and the RBI started a scheme that enriched some NRIs hugely.

Does this mean RBI and the government were in cahoots with some handpicked individuals? No. The scheme was a policy decision to get more dollars.

The 80:20 scheme needs to be seen in the same light. The government banned gold imports because it was a large import item, and was unimportant enough for the country to do without for some time.

Both the government and the RBI were aware that anything rationed would benefit those who could lay hands on any amount of gold.

Yes, the STHs made money when they were allowed to import from May 2014, but one needs to note that from June 2013 to May 2014, a lot of jewellers made tonnes of money on gold imported by the banks.

This was how the scheme was designed: only four banks and two government trading companies MMTC and STC were allowed to import gold.

Jewellers who had a record of imports and exports until May 2013, were sold this gold at the landed price on promise they would use 20% to export jewellery.

They had the licence to sell the remaining 80% in the domestic market which earned them a massive premium.

If the CAG’s office tries to find out how many jewellers benefitted before the policy was liberalized, they will find that a clutch of jewellers made even more money than the Rs 4,500 crore the STHs did after May 2014. But that’s how rationing works.

In war time, nations ban a bunch of unnecessary imports, or impose price controls.

Black markets flourish and those who have the goods make money, nevertheless during wars, governments continue to impose rationing.

In all these cases, one assumes the larger good that is served by controlling prices or imports is more than the evil of some people making money.

Likewise in 2013, the extra bucks made by some FCNR 9B depositors and some jewellers was considered a price the nation had to pay to control the exchange rate from a free fall.

It may be recalled, at that time the United Progressive Alliance (UPA) government also decided to raise the price of petrol and diesel by 50 paise every month.

This was politically suicidal for the UPA because raising prices on the eve of an election would have hurt the ruling party.

But, the government went ahead and raised prices so that at higher prices, fuel consumption would fall and the country’s trade deficit would correct.

This act of the UPA government of raising fuel prices even on the eve of an election to serve a larger good is an act of statesmanship.

Short point, in the face of a massive current account deficit and a run on the rupee, many actions were taken by the government and the RBI to re-balance the deficit.

Some policies benefitted some persons. But witch hunting RBI officials of all people, is unfair and even dangerous.

Next time the country’s currency is in danger, RBI officials, who so far have been in the forefront of the fire fighting, may simply want to watch their own back sides instead of serving the country.

This column had pleaded in the past, and pleads again; controlling the exchange rate is a delicate task. Questioning RBI’s motives on hindsight can be a costly blunder.

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

Gold prices end higher on positive global cues

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

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Gold regained its sheen to close higher by Rs 120 to Rs 31,470 per ten grams at the bullion market during the week, riding on positive global cues and increased buying by local jewellers.

Silver, after moving between gains and losses, finally settled the week flat at Rs 39,200 per kg.

Bullion traders said, apart from a firm trend overseas, increased buying by local jewellers at the domestic spot market, mainly attributed the rise in gold prices.

Globally, gold ended the week a shade higher at USD 1,333.40 an ounce in New York.

In the national capital, gold of 99.9% and 99.5% purity commenced the week higher at Rs 31,460 and Rs 31,310 per ten grams and advanced to Rs 31,610 and Rs 31,460 on fresh buying support along with firm global cues.

Later, it met with resistance at higher levels and slipped to Rs 31,350 and Rs 31,200 on the back of a weak global trend before bouncing back to close at Rs 31,470 and Rs 31,320 per ten grams respectively, showing a moderate rise of Rs 120 each.

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

Global cues and low demand result in the fall of gold price

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

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Gold prices went down by Rs 200 to Rs 31,350 per ten grams at the bullion market today, much in tandem with a weak trend overseas and low demand from local jewellers.

However, silver prices recovered by Rs 75 to Rs 39,050 per kg on scattered enquiries from industrial units and coin makers.

Traders attributed the weakness in gold prices to lower demand from local jewellers, along with the global downtrend.

Overseas, gold fell 0.30 per cent to USD 1,322.20 an ounce and silver by 0.64 per cent to USD 16.26 an ounce in Singapore.

In the national capital, gold of 99.9 percent and 99.5 percent purity plunged by Rs 200 each to Rs 31,350 and Rs 31,200 per ten grams, respectively. The metal had shed Rs 60 yesterday.

Sovereign, however, remained steady at Rs 24,800 per piece of eight grams.

On the other hand, silver ready edged higher by Rs 75 to Rs 39,050 per kg and weekly-based delivery by Rs 95 to Rs 38,220 per kg.

Silver coins, however, remained unaltered at Rs 74,000 for buying and Rs 75,000 for selling of 100 pieces.

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

Gold prices fall as US-China trade tensions ease

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

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Gold prices fell on Thursday after the United States and China signalled willingness to resolve a trade dispute through negotiations, reducing demand for bullion as a perceived safe place to park money.

Investors moved back into equities, sending global stock markets higher, while the dollar strengthened, making gold more expensive for users of other currencies.

“It’s been a double whammy (for gold),” said Fawad Razaqzada, an analyst at FOREX.com. “Stock markets have stabilised, at least for the time being, and that has reduced demand for safe havens.”

The slide in gold prices had also created a negative technical picture that encouraged further selling, Razaqzada said.

Spot gold was down 0.5% at $1,326.81 an ounce at 1502 GMT.

US gold futures were 0.7% lower at $1,330.70 an ounce.

Gold had surged to $1,348.06 on Wednesday after Beijing threatened to retaliate against proposed US tariffs on Chinese imports worth around $50 billion with its own duties on US products including soybeans, planes, cars, whiskey and chemicals.

Both Washington and Beijing later said they were willing to negotiate a resolution.

President Donald Trump’s top economic adviser called the announcements by the two countries mere opening proposals and suggested the U.S. tariffs may never go into effect, while China’s ambassador in Washington said Beijing’s preference was to resolve the dispute through talks.

Technical support for gold was now around $1,320 and the 100-day moving average at $1,311, said MKS trader Sam Laughlin.

Gold prices reached an 18-month high of $1,366,07 in January but have since then been locked in a trading range between around $1,310 and $1,360.

Investors were looking to US jobs data on Friday to give new direction to prices. Strong employment and wage growth would encourage the Federal Reserve to raise US interest rates more aggressively and push gold prices lower.

Gold is sensitive to rising rates because they push up bond yields, reducing the attractiveness of non-yielding bullion, and tend to boost the dollar, in which gold is priced.

Trading volumes were likely to be lower however with markets in mainland China, the world’s largest gold consumer, closed on Thursday and Friday for the Tomb Sweeping Day holiday.

In other precious metals, spot silver was up 0.3% at $16.33 an ounce.

Platinum was 0.3% higher at $915.10 an ounce after touching $901.50, its lowest since December.

Palladium was down 1% at $915.70 an ounce after hitting a new six-month low at $907.22.

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

Commodity Corner: Strengthening US dollar weighing on gold, silver prices

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

Listen to the Article (6 Minutes)

Commodity Corner by Manisha Gupta guides you through the most important trades in commodities, take a first-hand look at how these markets are moving and what is at stake for investors.

Strengthening US dollar is weighing on the gold and silver prices.

Trading strategies from Kedia Commodities are as follows:

Sell crude oil April Strategy with a stop loss of Rs 4,180, target of Rs 4,040.

Sell Silver May Strategy with a stop loss of Rs 38,850, target of Rs 38,100.

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