Gold and Silver recovered on the bullion market on renewed stockists demand in view of higher global advices.
Gold rose in Asia after the biggest weekly decline in prices in 25 years enticed buying from jewelers and as the dollar fell on concern that US consumer confidence dropped to a five-year low.
Gold traded as high as $927.20 an ounce, 10 per cent down from the record 1,032.70 reached on March 17. Bullion for immediate delivery gained $10.38 to 925.68 an ounce and silver 2.2 per cent to $17.42 an ounce.
Gold in Hong Kong closed higher at $931.60/932.20 per ounce as against $921.00/921.70 per ounce previously and in London, it was fixed higher in the morning at $930.65 per ounce as against $925.75 per ounce previously.
Turning to the domestic market, standard gold (99.5 purity) firmed up by Rs 110 per ten grams to Rs 12,115 from Rs 12,005 previously.
Pure gold (99.9 purity) also looked up to Rs 12,175 from last close of Rs 12,065.
Silver ready (.999 fineness) moved up by Rs 325 per kilo to Rs 22,990 from Rs 22,665 previously.
Wednesday, March 26, 2008
Monday, March 24, 2008
Goald Prices Near 1 Month Low
Gold dropped and held near its lowest in a month on Tuesday, with its appeal as an alternative investment and a hedge against inflation weakened by a firming U.S. dollar and sliding crude oil prices.
Investors were on the sidelines after their confidence was shaken by a recent broad-based sell-off in commodities. Gold has lost more than 10 percent in value since spiking to an historic high of $1,030.80 an ounce on March 17.
Gold fell to $919.20/920.00 ounce from $920.90/921.70 an ounce in New York on Monday and was within sight of last week's one-month low of $904.65 an ounce.
"If gold were to start heading lower again, say below $900 an ounce, that might create a temporary cycle of further selling," said an analyst at Commonwealth Bank of Australia in Sydney.
"As investors' sentiment turned, gold was then especially vulnerable to that change in sentiment. I think it's difficult to see which way gold would go in the very short term."
Platinum fell while silver and palladium gained but stayed below recent highs. Precious metals, oil, grains and other agricultural products tumbled last week in a wave of selling as funds cashed out, taking profits at record high prices.
The dollar held onto gains after better-than-expected U.S. housing data revived optimism towards the world's biggest economy. The euro hardly changed at $1.5433 -- well below a record high of $1.5905 hit last week.
Sunday, March 23, 2008
Gold Prices decline on profit booking
Gold prices last week hit a record $1,030.90 an ounce, but fell sharply and closed at $917, far lower than the previous week’s close. In fact, the yellow metal’s fall from the peak has been so sharp that it has shed 11.5 per cent.
What the market is currently witnessing is profit-booking and analysts have no two views on gold being an asset class.
The crash in the equities market, lead by the Bear Stearns saga, was the primary reason for the profit booking — more than the Fed’s 75 basis point rate cut — and the precious metal’s fall. The fact is that funds are ensuring that they are left with profits in at least the commodities counter, after being wrapped hard on the knuckles in the equities market. After falling to $903, gold has recovered to end the week at $917.
According to Mr Anul Goel of Kotak Commodity Services Ltd, gold witnessed a severe rejection on the day it peaked by forming a gravestone doji and latter a shooting star candle-stick pattern on the charts. In a nutshell, it means that the current trend can come to a pause but not necessarily turn down as it could have also been sideways. On the next day, a one month up trendline (red) was broken on a closing basis with decent volumes. According to Mr Anul, the Fed rate cut shows more concern towards containing inflation, thereby putting a downward pressure on the gold prices that is mainly used as an inflation hedge. On the same day a much longer trend line was also broken with huge volumes and there was a sharp fall in open interest exhibiting longs being liquidated.
Saturday, March 22, 2008
Gold: The Safe Investment
With the sock market in a bear hug, a wave of fear has gripped all the investors. In these uncertain times, you may have also found yourself struggling, and sometimes worried, on how to get the right portfolio mix and avoid the bear’s claws.
I know a friend of mine, who ran out of his wits after his year-long investments eroded in a matter of few seconds. If analysts are to be believed, in such turbulent phases, you can always look up to gold as an investment option not only as an insurance against the choppy markets but for better returns as well.
The Golden Scenario :
With an expected slower US growth momentum, Fed rate easing, a weakening dollar, rising oil prices and heightened geopolitical concerns, gold prices appear to be firmly supported in the months ahead. Strong investor demand coupled with strong jewelery demand from Asia and the Middle East is also likely to push the prices. “In the present context, gold is expected to provide better capital appreciation, provided it is bought at a right price. It is also a good hedge against inflation,” says Mukesh Agarwal, director of Wealthcare Securities.
Strong fundamentals put aside, gold has also given a return of 18% in the first two months of 2008. “Today, it is the most recession-proof asset and is actually playing the role of insurance in the investor’s portfolio,” says Vandana Bharti, senior research analyst (commodity) at SMC.
I know a friend of mine, who ran out of his wits after his year-long investments eroded in a matter of few seconds. If analysts are to be believed, in such turbulent phases, you can always look up to gold as an investment option not only as an insurance against the choppy markets but for better returns as well.
The Golden Scenario :
With an expected slower US growth momentum, Fed rate easing, a weakening dollar, rising oil prices and heightened geopolitical concerns, gold prices appear to be firmly supported in the months ahead. Strong investor demand coupled with strong jewelery demand from Asia and the Middle East is also likely to push the prices. “In the present context, gold is expected to provide better capital appreciation, provided it is bought at a right price. It is also a good hedge against inflation,” says Mukesh Agarwal, director of Wealthcare Securities.
Strong fundamentals put aside, gold has also given a return of 18% in the first two months of 2008. “Today, it is the most recession-proof asset and is actually playing the role of insurance in the investor’s portfolio,” says Vandana Bharti, senior research analyst (commodity) at SMC.
Thursday, March 20, 2008
Gold Prices Slide
April gold futures fell $25.30, or 2.7%, to end at $920 an ounce on the New York Mercantile Exchange. On Wednesday, gold plummeted $59 as traders began selling most commodities, many of which had recently rallied to historic highs.
After hitting a record high of $1,034 an ounce Monday, gold's subsequent sharp drop led it to post a 8.3% decline for the shortened week. U.S. markets, including the Nymex, will be closed Friday.
Among other metals, copper for May delivery lost 6.35 cents, or 1.7%, to end at $3.53 a pound. June palladium slid $18.40, or 3.9%, to $446.05 an ounce. April platinum lost $9.70, or 0.5%, to $1,877.30 an ounce.
May silver fell $1.59, or 8.6%, to $16.85 an ounce.
Alongside metals, crude-oil futures also continued to fall, with the May contract losing 70 cents, or 0.7%, to $101.94 a barrel.Other commodities also slid, with the Reuters-Jefferies CRB index off 1.7%
Wednesday, March 19, 2008
Gold As Investment
The usual benchmark for the price of gold is known as the London Gold Fixing, a twice-daily (telephone) meeting of representatives from five bullion-trading firms. Furthermore, there is active gold trading based on the intra-day spot price, derived from gold-trading markets around the world as they open and close throughout the day.
Today, like all investments and commodities, the price of gold is ultimately driven by supply and demand, including hoarding and disposal. Unlike most other commodities, the hoarding and disposal plays a much bigger role in affecting the price, because most of the gold ever mined still exists and is potentially able to come on to the market for the right price. Given the huge quantity of hoarded gold, compared to the annual production, the price of gold is mainly affected by changes in sentiment, rather than changes in annual production.
According to the World Gold Council, annual mine production of gold over the last few years has been close to 2,500 tonnes. About 3,000 tonnes goes into jewelry or industrial/dental production, and around 500 tonnes goes to retail investors and exchange traded gold funds. This translates to an annual demand for gold to be 1000 tonnes in excess over mine production which has come from central bank sales and other disposal. Demand from the electronics industry is rising by 11% a year, jewelry by 19%, and industrial and dental by 21%.
Central banks and the International Monetary Fund play an important role in the gold price. At the end of 2004 central banks and official organizations held 19 percent of all above-ground gold as official gold reserves. The Washington Agreement on Gold (WAG), which dates from September 1999, limits gold sales by its members (Europe, United States, Japan, Australia, Bank for International Settlements and the International Monetary Fund) to less than 400 tonnes a year. European central banks, such as the Bank of England and Swiss National Bank, have been key sellers of gold over this period.
Although central banks do not generally announce gold purchases in advance, some, such as Russia, have expressed interest in growing their gold reserves again as of late 2005 . In early 2006, China, which only holds 1.3% of its reserves in gold [16], announced that it was looking for ways to improve the returns on its official reserves. Many bulls hope that this signals that China might reposition more of its holdings into gold in line with other Central Banks.
Today, like all investments and commodities, the price of gold is ultimately driven by supply and demand, including hoarding and disposal. Unlike most other commodities, the hoarding and disposal plays a much bigger role in affecting the price, because most of the gold ever mined still exists and is potentially able to come on to the market for the right price. Given the huge quantity of hoarded gold, compared to the annual production, the price of gold is mainly affected by changes in sentiment, rather than changes in annual production.
According to the World Gold Council, annual mine production of gold over the last few years has been close to 2,500 tonnes. About 3,000 tonnes goes into jewelry or industrial/dental production, and around 500 tonnes goes to retail investors and exchange traded gold funds. This translates to an annual demand for gold to be 1000 tonnes in excess over mine production which has come from central bank sales and other disposal. Demand from the electronics industry is rising by 11% a year, jewelry by 19%, and industrial and dental by 21%.
Central banks and the International Monetary Fund play an important role in the gold price. At the end of 2004 central banks and official organizations held 19 percent of all above-ground gold as official gold reserves. The Washington Agreement on Gold (WAG), which dates from September 1999, limits gold sales by its members (Europe, United States, Japan, Australia, Bank for International Settlements and the International Monetary Fund) to less than 400 tonnes a year. European central banks, such as the Bank of England and Swiss National Bank, have been key sellers of gold over this period.
Although central banks do not generally announce gold purchases in advance, some, such as Russia, have expressed interest in growing their gold reserves again as of late 2005 . In early 2006, China, which only holds 1.3% of its reserves in gold [16], announced that it was looking for ways to improve the returns on its official reserves. Many bulls hope that this signals that China might reposition more of its holdings into gold in line with other Central Banks.
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