Clearly the gold bulls needed Bernanke to promise additional easing and while the Fed left open the timing of such a move, the trade seemed to take for granted that the easing would come in the next FOMC meeting. In addition to support from the Fed, gold probably saw some support from declining EU anxiety and soaring US equity market action. News of a possible change in leadership of the Bundesbank prompted some traders to suggest that the implementation of a European bond buying program might be in the cards soon. With such significant compacted upside action today, some of the buying might have been the result of technical influences.
Friday 31 August 2012
Wednesday 29 August 2012
GOLD REPORT
IIndian gold importers took to the sidelines on Wednesday, seeking price direction during the ongoing wedding and festive season as prices stayed steady near its peak.
The most-active gold for October delivery on the Multi Commodity Exchange (MCX) was 0.01 percent lower at 30,945 rupees per 10 grams. The contract touched a record high of 31,110 rupees on Monday.
"Sales are slow, there are no takers at these prices," said Harshad Ajmera, proprietor of JJ Gold House in Kolkata.
The festival season is underway in India, the world's biggest consumer of bullion, and will continue till November.
Gold imports to India are likely to fall by as much as 26 percent, or by 200 to 250 tonnes, in 2012 as record high prices hits consumer budgets.
Silver also traded steady in tandem with the yellow metal. * Silver for September delivery on the MCX was 0.06 percent higher at 57,640 rupees per kg.
Gold is likely to hit a record high of over Rs 32,000 per 10 grams during Diwali due to rising tensions in West Asia, Bombay Bullion Association (BBA) said.
"Prices of gold may hit new highs around Diwali as rising tensions in West Asia may increase demand for the metal as a safe haven investment. Civil war in Syria and geopolitical tensions in Iran are major factors pushing up gold prices despite the fall in physical retail demand for the metal in India, China and many other countries," BBA President and Riddisiddhi Bullions Managing Director Prithviraj Kothari said in a release here today.
Strong possibility of the US announcing a third round of quantitative easing to boost the economy may also drive overseas gold prices up to USD 1,800 an ounce, Kothari added.
Gold prices have been consolidating since the beginning of the year as the market is waiting for the US Federal Reserve to undertake a third round of quantitative easing.
Indian investors expect RBI to announce stimulus measures at its meeting in September to boost the fragile economic recovery. "In such a scenario, we expect gold to cross over Rs 32,000 by Diwali," Kothari said.
Today, MCX gold for October delivery was at Rs 30,929 per 10 grams, while the international spot gold was ruling at USD 1667.69 an ounce.
Ruling high prices, weak monsoon, macroeconomic uncertainty and high inflation, which has reduced the disposable surplus income of the middle class, have hit demand for gold, which could drag down the country's imports to around 700 tonnes, Kothari said.
"Demand from the rural areas, which is around 70 percent of the total demand, will be sluggish due to poor rainfall."
According to the World Gold Council, India imported 969 tonnes of gold in 2011.
There may be a slight revival in demand as the wedding and festival season commences from early September.
"It looks like there may be a pick up in demand, but compared to last year it will still be lower by up to 50 percent," said Kothari.
The most-active gold for October delivery on the Multi Commodity Exchange (MCX) was 0.01 percent lower at 30,945 rupees per 10 grams. The contract touched a record high of 31,110 rupees on Monday.
"Sales are slow, there are no takers at these prices," said Harshad Ajmera, proprietor of JJ Gold House in Kolkata.
The festival season is underway in India, the world's biggest consumer of bullion, and will continue till November.
Gold imports to India are likely to fall by as much as 26 percent, or by 200 to 250 tonnes, in 2012 as record high prices hits consumer budgets.
Silver also traded steady in tandem with the yellow metal. * Silver for September delivery on the MCX was 0.06 percent higher at 57,640 rupees per kg.
Gold is likely to hit a record high of over Rs 32,000 per 10 grams during Diwali due to rising tensions in West Asia, Bombay Bullion Association (BBA) said.
"Prices of gold may hit new highs around Diwali as rising tensions in West Asia may increase demand for the metal as a safe haven investment. Civil war in Syria and geopolitical tensions in Iran are major factors pushing up gold prices despite the fall in physical retail demand for the metal in India, China and many other countries," BBA President and Riddisiddhi Bullions Managing Director Prithviraj Kothari said in a release here today.
Strong possibility of the US announcing a third round of quantitative easing to boost the economy may also drive overseas gold prices up to USD 1,800 an ounce, Kothari added.
Gold prices have been consolidating since the beginning of the year as the market is waiting for the US Federal Reserve to undertake a third round of quantitative easing.
Indian investors expect RBI to announce stimulus measures at its meeting in September to boost the fragile economic recovery. "In such a scenario, we expect gold to cross over Rs 32,000 by Diwali," Kothari said.
Today, MCX gold for October delivery was at Rs 30,929 per 10 grams, while the international spot gold was ruling at USD 1667.69 an ounce.
Ruling high prices, weak monsoon, macroeconomic uncertainty and high inflation, which has reduced the disposable surplus income of the middle class, have hit demand for gold, which could drag down the country's imports to around 700 tonnes, Kothari said.
"Demand from the rural areas, which is around 70 percent of the total demand, will be sluggish due to poor rainfall."
According to the World Gold Council, India imported 969 tonnes of gold in 2011.
There may be a slight revival in demand as the wedding and festival season commences from early September.
"It looks like there may be a pick up in demand, but compared to last year it will still be lower by up to 50 percent," said Kothari.
Where the Gold is headed in '12
Gold has been traditionally used as a hedge against inflation, political instability as a safe bet for the times of crisis. With Euro again strengthening against Dollar, International rates of Gold are likely to rise further. Estimated 1900$ level by year end and Rupee strengthening to 51 against Dollar, we may be seeing a rise of Rs 2500 to 3000 per 10 gms from today's levels by year end.
So I assign following levels to gold
September 1720$/ounce Dollar Rs 54 Hence Gold in Indian terms 31800
October 1800$/ounce Dollar Rs 53 Hence Gold in Indian terms 33000
November 1850$/ounce Dollar Rs 52 Hence Gold in Indian terms 33000
December 1900$/ounce Dollar Rs 51 Hence Gold in Indian terms 33800
So I assign following levels to gold
September 1720$/ounce Dollar Rs 54 Hence Gold in Indian terms 31800
October 1800$/ounce Dollar Rs 53 Hence Gold in Indian terms 33000
November 1850$/ounce Dollar Rs 52 Hence Gold in Indian terms 33000
December 1900$/ounce Dollar Rs 51 Hence Gold in Indian terms 33800
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