Prithviraj Kothari

Managing Director of Riddhisiddhi Bullion LTD (RSBL)

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GOLD CONTINUES TO GAIN SUPPORT FROM SAFE HAVEN BUYING

Gold remains the safe-haven asset for investors as the world moves towards an uncertain period. The market has been experiencing fluctuations in prices as the international trading activities get affected by the outbreak of the deadly virus. Coronavirus has proven to be supporting safe-haven demands as gold becomes reliable and stable for investments. The Indian gold market grows in demand and the future holds great prospects for both international and domestic markets. The New Year has brought forth several uncertainties in both political and economic status globally. The gold market which was at a low status in the year 2019 has been supported in 2020.

The Year 2020 welcomed various uncertainties with the trade tariff duties on hold between China and the USA, the Federal Reserves of USA announcement on cut rates was yet to be a known factor, the US airstrike on Iran, etc. All these factors boost the safe-haven demand buying of assets such as gold and silver. Although, the market prices have been going up and down, due to the equity market fluctuating occurrence. Coronavirus plays an important role in the support of safe-haven buying.

The virus which started in the city of Wuhan, China has spread to different parts of the world. As of now, the world has over one hundred thousand cases of Coronavirus. The World Health Organization (WHO) expects countries to do their best to contain it from further spread. Countries such as Italy, France, the UK, the USA, etc have been taken strict precautions. Flights to different parts of Europe are canceled. The world is on shutdown. Yet, the market seems to be moving towards buying gold. The stock market has also been greatly affected. China is considered the biggest market in the world and has created a huge downfall for many marketing sectors across the globe.

Investors and analysts expect the futuristic gains for the gold market to be towards positive gains. Equity markets have been on a slump as the virus takes over several countries. The Federal Reserve of the US in recent times of the virus outbreak announced its cutbacks on interest rates to support the falling market. This also has boosted the gold market as fewer interest rates will increase demand and buying of gold.

The government stimulus has been considered to be positive for the yellow metal prices. International gold prices also have inched up on fear about the impact of the Coronavirus outbreak. The United States have also suspended travel to and from virus impact Europe. The Indian rupee also has fallen sharply by 54 paise to 74.19 per dollar. This has also led to the support of the yellow metal prices. The sentiments in relation to gold prices remain positive so far.

Silver futures now trade at 0.19 percent lower at Rs 45,741 per kilogram. The prices have also opened at Rs 45,556 in comparison to the previous price at Rs 45,826 per kilogram. Palladium increased to 1.4 percent to $1,856.88 per ounce.

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US FEDERAL RESERVE BANK INTEREST RATE CUTS SUPPORTING MARKET GOLD PRICES

The US Federal Reserve bank's recent rate cuts are granting support to the price of gold in the global as well as the international market. The federal reserves have announced that there won’t be any increase in interest rates for import duties and the rates will be reduced to a reasonable count. This emergency move has created a sense of relief for the gold market. Gold traders and retailers expect the situation for the gold market to remain at the pace it is at which is reaching new records high. It is definitely a good situation for the gold market with growing benefits emerging to support the market. Investors are pushed to invest in safe-haven assets as equity markets grow uncertain due to the Coronavirus epidemic.

The virus outbreak in China has led to several trading activities slowing down in the world’s biggest market. The markets closing down in China due to the Coronavirus outbreak as affected the global market as a whole. It has pushed investors to move towards investing in gold and other safe-haven assets. The uncertainty occurring globally in all aspects is proving to be a beneficial factor for the gold market.

The Federal Reserve will be more inclined to cut interest rates now as the President of the United States of America’s Donald Trump finally followed through on his announcement to increase tariffs duties on US imports goods from China. But, the US Federal Reserve won’t be doing it so soon. It has to carry out several processes before it can move the policy change. Due to high import duties, the gold market was at low demand. This interest rate cuts will help smoothen the market activities back to functionality. As the New Year goes further, 2020 has proven to be a good one for the gold market with the unpredictability and uncertainty of the global economy and political agendas.

The deadly Coronavirus has posed as a risk to economic activity in the world. As stated by the Federal reserves that in light of these risks that set strong in the trading and economical activities in China with the world and also in support of achieving the maximum employment. The goal set for price stability, it is stated that the Federal Open Market Committee has decided today to lower the range of the federal funds rate by half a percentage point.

The Federal Reserve action in relation to the interest rate cuts could propose ease between other Central banks around the world. It's the decision was announced hours after Chairman Jerome Powell and finance chiefs from the Group of Seven nations said that they would use all supporting policy tools to achieve strong, sustainable growth and also safeguard the market against any downside risks. The lower rates will help ease the financial conditions by making the payments of debts easier to manage and also calms the volatility in the market. The Wall Street banks are expecting more policy initiatives from the US Federal Reserves. But, so far the gold market is in good positions.

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GOLD PRICE EDGES AHEAD IN THE INDIAN MARKET

The gold price rate in India rose today following advancement in the global rates. Gold futures on MCX rose from 0.4 percent to ₹42,668 per 10 gram, after finishing the previous two sessions. Gold price in the domestic market had also hit a new high rise of ₹43,788 per 10 gram. Silver prices also edged higher alongside the bullion today with silver futures on MCX rising from 0.72 percent to ₹46,910 per kilogram.

In the global markets, gold prices have also surged higher today as tension is still prevalent in relation to the impact of the deadly Coronavirus on the global economy and trading activities. The virus spread has continued to trigger investor’s decisions to move away from riskier assets and turn to safe-haven assets.

Spot gold prices increased to 0.3 percent to $1,644.11 per ounce. Amongst many precious metals, silver also rose higher up to 0.3 percent to $17.93 per ounce. While the prices of platinum have surged higher from 0.2 percent to $912.44 in the new session.  Palladium increased from 1.4 percent to $2,829.12 per ounce.

The global market has proven uncertain and unpredictable. The Wall Street stocks are lagging behind and demand has also decreased as fear of virus hits the market hard. Gold has become the safe-haven asset in high demand now. This has also pushed gold prices in the market higher, as investors are seeking to invest in precious metals on the rising effect of the pandemic, according to reports. In this session, there have been moderate physical market activities and chances of higher-level profit booking may reduce major upsides.

In the international markets, gold prices are up 8 percent this year, supported by the widespread and increase in death toll rates of Coronavirus cases worldwide that have proven to threaten the proper functioning of the global economic activity. In the events of the virus effect, there would be a gold top of $1800/oz already for a 3 month period. The gold forecast also has announced of silver price rise too.

Reports today are of 29 more deaths from the Coronavirus epidemic in China, but the spread of the virus outside the country is creating a global alarm. South Korea has announced almost 1,600 cases, the highest in any country outside China, while Italy now has 400. Both countries have reported 12 deaths in total. This situation has put a hold on trading activities and slowed down the transportation of goods. Several countries are looking to stopping any flights from both these countries.

US President Donald Trump announced that he was considering US travel restrictions on both Italy and South Korea over Coronavirus rampant spread. Countries are preparing for the apparent occurrences of such situation and the beds\hospitals are been set to make sure there is an immediate action taken in case such situations happen to make it to America. Gold has continued to gain support from the global uncertainties and unpredictability. The market will see more increase as the virus spread rate isn’t going to experience a full stop anytime soon.

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GOLD RATES REACHES NEW RECORDS HIGH

Prithviraj Kothari | Gold prices reached new record highs today in the domestic markets for the second consecutive time in the month of February. On Multi Commodity Exchange (MCX), the gold futures rose from 0.4 percent to Rs. 41,619 per 10 gram. In the previous market session, gold had increased to a record high at about Rs. 650 per 10 gram in following a new surge in the yellow metal's price range in the global markets. Whereas, on Multi Commodity Exchange (MCX) Silver futures rose from 0.7 percent to Rs. 47,595 per kilogram.

Spot gold prices remained at a steady pace with a 7-year high rise of 1,601.77 dollars per ounce after experiencing a big surplus increase in the previous market session. The global concerns in regards to the fallout of the deadly Coronavirus affecting the global economic growth have greatly supported the yellow metal which is considered to be a safe haven asset in terms of global uncertainties. Although, on the downside, there have been a recent decrease in the spread of the new virus and cases are becoming minimal which might affect the prices of stock and lower the demand in gold. India’s equities amongst other Asian countries equities were cautiously higher according to reports.

China has reported an estimate of 1,749 new confirmed cases of Coronavirus infections in its territory. It has been at its lowest spread since the month of January 29th even though the death toll in the country still topped more than 2,000 as of now.

Gold price rates globally have increased up to 1,600 in US dollars amidst concerns over the economic impact of the Chinese epidemic in relation to the virus spread. However, sources have sensed that the gold markets will eventually start pricing high, as a matter of fact, the worst-case scenario in terms of the Coronavirus crisis seems to be finally over, with new infection rates lowering down and death tolls slightly at a slow peak.

On the gold price outlook, the gold market hopes that the gold price will retreat at a lower position from the current highs to boost investors and consumer demands once the adverse effects of deadly virus fade and the global economy becomes stabilized. Gold investors are currently watching out for the Federal Reserve's announcements on policy, which is expected to set the market off to a suitable position. The US Federal Reserve has also kept interest rates unchanged in its previous policy meeting in which the gold market and investors in gold will procure huge benefits.

The lower the interest rates, the more there would be an opportunity cost for holders of non-yielding bullion and also weigh on the US currency. Investment demand for gold has also been observed to be higher as coronavirus fears lead investors to choose to invest in safe-haven assets like gold, silver, etc.

Also, the holdings of SPDR Gold Trust which is the world's largest gold-backed exchange-traded fund. The price range has increased from 0.6% to 929.84 tonnes and it is at its highest over three years.

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A POSITIVE OUTLOOK FOR GOLD IN DOMESTIC MARKET

Prithviraj Kothari | Gold prices gain positive momentum in the domestic market as positive commentary reports that the US Fed has pulled back pressure on the prices. However, some of the effects of the outlook were due to the offset by the fast-spreading coronavirus outbreak that is hitting China and the overall global economy.

The USA Federal Reserve stated that the US economy slowed down in the previous year on the evident weak global growth in terms of trade and investments of other unreliable assets like stocks, etc. The key risks have reduced and the likelihood of any recession has declined as well. Although, there has been a possible recognized risk that may lead to an economic downturn due to the fallout from the deadly virus outbreak.

Gold futures experienced a decrease from 0.16 percent to Rs 40,579 per 10 grams. Although, silver futures slowed down from 0.11 percent to Rs 46,055 per kilogram, gold futures in the US have also increased by 0.3 percent to $1,577.50.

In the global market, gold prices gained positive momentum on rising concerns over the spreading Coronavirus and its impact on global economic growth. Spot gold increased by 0.1 percent to $1,572.01 per ounce.

Gold prices in India consist of 3 percent good and services tax and 12.5 percent import duty. The price of gold has been stated to remain the same according to reports. As gold prices rose in the domestic market, the price of silver has gradually declined. As updates on demand for stocks on Wall Street declined drastically on the global uncertainties and outbreak, this has supported the demand in other safe-haven assets like gold. Investors are pushing towards the purchase of gold in the global economic fluctuations. The Japanese yen also depreciated due to the coronavirus outbreak.

As China accounts for close to third of the global economic growth, this virus epidemic has taken a toll on all rounds of trade and investments. But, the gold market has been benefiting drastically from these occurrences. The World Health Organization declares the virus as a national and global threat. As there have not been any vaccine developed that could eliminate this virus in the human system and cure victimized people, the situation may likely be a prolonged one as the death toll for coronavirus keeps increasing and the demand for safe-haven assets will continue to rise. The trade tariffs, USA airstrike on Iraq, Coronavirus, etc have been huge factors in how the demand for gold has been fairing so far. Prices are at a positive level and the domestic market has been sailing high through this global crisis.

Although, gold prices had fallen over 1 percent in global markets as sentiments improved after China's moved to cut tariffs on some US imports goods and have also procured massive liquidity into the markets. Also, positive economic status from the US has mellowed down investor's nerves. Gold continues to find solace as global sentiments in the trading market increases.

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GOLD PRICES PUSHES FORWARD AS UNCERTAINTIES CONTINUES

Prithviraj Kothari | Gold in Indian market trades higher as fears spread over the life-threatening coronavirus and its economic impact granting support to the safe-haven buying of gold and other assets, which is supposed to head higher after witnessing high demand by investors.

China has moved towards cutting off tariffs on several US good imports that has moved the global stock markets towards a high rise. Bullion trades higher in the domestic market at Rs 84 which is 0.21 percent. Also, it was at Rs 40,435 per 10 gram. Experts have stated that the escalating fears of the deadly virus will keep the interest alive in the Gold market and even push it towards 40,500 levels according to reports. In the previous trading sessions, the precious metal had closed at Rs 40,869 per 10 gram. Silver prices also gained positive momentum from Rs 140 to Rs 46,881 per kg and also from Rs 46,741 per kilogram.

According to various analysts, Spot gold for 24 Karat in Delhi traded up to Rs 150 including buying in gold metals across the board. In the international market, gold and silver were both sailing high with gains at USD 1,560 per ounce and USD 17.70 per ounce, which shows a huge leap for the gold industry across the globe.

Gold prices traded higher and a slight positive observation was made in the trade as well, on back of fears over a rapidly spreading coronavirus outbreak and its economic impact fuelled safe-haven buying demand.

After a long time, golf prices finally touched below 20-EMA placing at 40,200. It has shown that signs of correction can escalate further towards a 50 day EMA which will be placed at 39500.

RSI & MACD are signaling basing range moves. For the day, 40400 to 40550 will act as resistance, whereas 40250 to 40125 will act as supports. However, 40500 levels hold a strong resistance where some sideways high rise momentum may continue to signal positive support in the 40150 to 40500 levels.

On the daily chart, Gold traded flat to positive and is trading slightly positive on Friday, on the back of fears over a rapidly spreading coronavirus outbreak and its economic impact fuelled safe-haven buying.

According to reports, 73 people in China died from the deadly virus outbreak, the highest daily increase so far observed worldwide. The death toll now stands at 563. However, the World Health Organization (WHO) played down several media reports stating a breakthrough drug that has been discovered to treat people infected with the new deadly coronavirus.

MCX Gold April has bounced back after taking the support of 39900 levels & has started to trade above 21-Daily Moving Average which is placed at 40200 levels which suggests a bounce book momentum from these levels. •

International Gold $1558 will hold support & upside $1575 will act a strong resistance. It may trade in $1558-$1575 range.

MCX Gold purchase in the range of 40320-40300 with 40200 as stops loss and target of 40540 levels.

Gold prices gained momentum from Rs 150 to Rs 41,019 per 10 gram following the rise in demand globally as investors move towards safe-haven buying.

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AN EXPECTED TWIST IN BUYING GOLD WITH INDIAN RUPEE

Prithviraj Kothari | India is viewed as the second-biggest purchaser of gold on the planet after China. Gold conveys an enormous slant in India. It is a piece of the way of life and conventions of Indians. It is taken a gander at as a type of riches and flourishing. At the point when we watch the Indian side of the gold market, investigating gold's cost in the Indian rupee is important. At the point when the cost of gold is broke down, numerous financial specialists watch the presentation regarding the US dollar. In spite of the fact that there is a valid justification for why financial specialists do that, it is on the grounds that the dollar is the world's most dominant money. Notwithstanding, regardless of the dollar's quality, it's not the cash that a large portion of the financial specialists over the globe use on an everyday premise or to buy gold. Likewise, on the off chance that we take a gander at the exhibition of gold just as far as the dollar would be enormously narrowing one's perspective, and restricting the chances of accomplishment. The USA has positioned the third greatest customer of gold yet that is short of what one-fourth of the Indian gold utilization. In this manner, Indian gold purchasers affect the major circumstance of gold as it were. Along these lines, in the event that you are utilizing the Indian rupees to buy gold, you don't need to stress over a decrease in esteem. The place of refuge metal additions energy during the political and worldwide vulnerability, as financial specialists move away from dangerous advantages for advantage from the gold. The yellow metal has consistently gone about as an approach to make a benefit or hold a potential benefit in the future when costs move towards a tall structure. The acquisition of gold as a place of refuge gives speculators a budgetary lift when financial exchanges are flimsy.

The New Year 2020 invited in a few political and worldwide vulnerabilities that have helped the costs of gold in the Indian market a positive way. One of the pressures was the political clash among Iran and the USA on the airstrike that was arranged by the President of the US Donald Trump that murdered the Iranian Commander General Qasem Soleimani which shocked Iran. The cost of gold flooded high during this occurrence and because of the dollar devaluing, gold saw numerous long stretches of expanding request. The ongoing spread of the Corona-infection in China that has become a danger all around contaminating more than 1000 individuals and slaughtered near 400 individuals have pushed financial specialists to move towards the place of refuge metal from hazardous wares and resources. Costs have picked up force and the residential gold market has recuperated from the earlier year.

Putting resources into gold gives greater benefits over the long haul as a result of its impressive strength in contrast with different types of advantages. It is during this period that individuals and speculators put resources into gold as a quick response to political disturbance which prompts expanded interest and cost. Stocks and different wares in the business sectors perform ineffectively during vulnerability periods which offers help to the bullion. Towards the finish of 2019 and to the start of this current year, there have been political pressures as far as exchange settlements, clashes and different worldwide strains that gold has profited by, the interest of gold is relied upon to continue developing in India as the occasions haven't predicated any progressions at any point in the near future. Likewise, with the spending limit 2020 to 21soon to be discharged, will assume a job in the boosting of the gold markets in India as the legislature of India is relied upon to start approaches, for example, the hallmarking of gold, the decrease in gold import obligations and a lot more to help support a positive execution in the residential market.

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Mr. Prithviraj Kothari, National President of IBJA Welcomes Government’s Decision of Compulsory Hallmarking of Gold Jewelry

Mumbai, Maharashtra, India:  India ranks number one in the world when it comes to gold consumption, and for more than a decade, the Government of India and established gold associations of India have been working towards bringing in better and more streamlined regulations for gold trade at the retail level. Their efforts finally paid off and the Government of India recently declared that from 15 January 2021 onwards, only hallmarked jewelry will be sold in India. To be precise, all 14, 18, and 22-carat gold items will have to be compulsorily hallmarked before sale but small quantities of jewelry such as 2 g or less are not required to be hallmarked.

Read More Here: https://www.businesswireindia.com/mr-prithviraj-kothari-national-president-of-ibja-welcomes-governments-decision-of-compulsory-hallmarking-of-gold-jewelry-66728.html

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GOLD PRICE SLACKS AFTER THE CORONA VIRUS OUTBURST

In times of uncertainty, gold prices benefits. The recent coronavirus that spread across China and has also affected Australia and the USA. The virus which is said to have affected 400 people and confirmed 9 deaths has created a fear in the minds of investors. The first case of the virus was reported in the United States of America. As other metals and assets have proven to be unsafe and risky, investors have started focusing on gold metal which is considered a safe haven.

The dollar has gained momentum and making gold more expensive for countries using different currencies. Investors have been assessing the economic effects of this epidemic caused by the coronavirus outbreak that plights China. Spot gold was down at 0.3 percent to $1,553.27 per ounce. The USA gold futures slacked behind to 0.3 percent at $1,553.30.

The virus outburst has led to various sectors also afraid of the outcome. Travel plans and canceled flights have led to more economical fear amongst the investors. The Chinese Lunar New Year holidays which are supposed to kick-start traveling expenditure for hundreds of millions of travelers are lacking behind due to news of the dangerous virus spreading rampantly across China.

Asia stocks still steady ahead, although investors are skeptical of the futuristic path for the upcoming weeks. The US-China trade is set to go off which could boost the dollar. The USA economy is also showing signs of recovery which could initiate an increase in the price of gold in different countries, including India. This month the US economic growth could outperform projections.

The consumption of gold in China for the first time in three years fell short. China considered one of the world’s biggest markets for gold to hit an economic slowdown because of the coronavirus epidemic that floods the country. China is currently under a national crisis. This would mean less demand during the biggest festive season which is the Lunar New Year.

The gold market is struggling to gain momentum as the sentiments in the equity market build.  As the Indian gold market looks towards the international outcomes. The price for god in India will be at an uncertain stage due to these situations.

Other precious metals such as palladium slacked by 0.7 percent to $2,386.00 an ounce. Silver also fell at 0.4 percent to $17.70 per ounce and platinum slipped by 0.7 percent to $992.15.

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INDIA’S POLICY WATCH FOR GOLD

After the US armed forces assassinated the General Soleimani of Iran, the prices of gold have moved towards an upward direction. The more the world becomes an uncertain place and politics creates disruption, the more likely that people put their trust in the safe-haven metal gold. Though the prices have settled a bit, this has not stopped several reports stating that the ultimate target for gold in the long-term would be $4,200 per ounce.

The price has doubled more than what most market analysts have been stating in the past few months. It has increased almost three times the current gold price range of $1,562 per ounce. In the past few years, the Central Banks all around the world have moved towards purchasing gold and increasing the gold reserves.

India started purchasing gold during the year 2002. About 200 tonnes of gold was bought from the IMF (International Monetary Fund). But in the past three years, India has steadily gradually increased its gold reserves. The Reserve Bank of India would probably have purchased more gold in the last year if only the Central government did not intervene and restore its claim of the cash reserves. Reports have indicated that the government has already been keeping a close watch on the central bank’s money.

For now, the Central bank’s reserves could be at least 100 tonnes more than it is now if the government of India follows the simple practice of keeping all seized gold, the income tax, and the customs with the Reserve bank of India. The Centralization of gold would have also served another purpose of ensuring that it remains safe. Recently, there are good reasons to believe that the gold lying in the government of India’s vaults apart from those that belong to the Reserve Bank of India is not safe. There are so many cases of gold being substituted with fake metals. \ In the past few years, almost 91 kg of gold has been stolen from the government vaults, which is why the government is advised to put all the gold in a single vault that would be under the Reserve bank of India in place with a single ledger. If gold has to be returned from whom it has been stolen from, this too should be entered in the ledger.

Most of the biggest scams in India have taken place when there was no single centralized ledger. The gold scam that is getting bigger could also go out of hand if sensible practices are not adopted immediately. This is the reason why many gold investors and traders have been demanding a separate gold regulator under the Reserve bank of India.

The amount of gold in private hands exceeds 25,000 tonnes, which is at Rs 30,000 per 10 grams that could also translate into a large amount of Rs 7,500 lakh crore rupees. This amount should be enough to create a regulator for gold.

The importance of having a regulator is to be in charge of introducing healthy practices in the industry and also reducing the whimsical flip-flopping of the government when it comes to gold.

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US-IRAN CONFLICT TO TRIGGER RISE IN GOLD PRICE

The geopolitical tension between the US and Iran has affected the price of gold in the global market. The gold price crossed $1,600 per ounce in the international spot market. The market will further experience a decrease in the import of gold as the conflict continues to be evident and shows no room for reconciliation anytime soon.

Under the orders of the US president, Donald Trump, an airstrike was sent towards Iran which led to the killing of the Iranian special commander. Recently, Iran has struck back at the US air bases in Iraq in retaliation to the attack on its soldiers.

This tension is causing uncertainty in the god market. Gold imports expected to move to halve on a year to year account this month to 20-25 tonnes.  The rise of price in gold will affect the domestic market as it moves closer towards the wedding season. If the price pushes towards a high rise, this would discourage consumer demand for the yellow metal. Investors and traders are disappointed in the sudden outcome as the demand for gold may possibly decrease.

Consumer demand may weaken further. Also, it would have an effect on imports which will come down to a 40 to 50 percent level if there is no demand for gold in the market. The price of gold in the Indian spot market hovers around Rs 41,253 per 10 gram, it is said to move towards 30 percent more than it was yesterday which was at a price of Rs 31,728.

The gold price rose by Rs 680 per 10 gram in the spot market on Wednesday from Rs 40,573 on Tuesday. In the international market has also experienced a surge in gold price by more than 2 percent, which crosses the mark of $1,600 on Wednesday, due to investors seeking cover under safe-haven metals for investments.

On Wednesday, Spot gold hit a peak of $1,610.90 per ounce which reached its highest level since 2013, on Wednesday. US gold futures also rallied a 2 percent raise to $1,605.80.

Silver gained 0.2 percent to $18.12 per ounce, after hitting its highest since September at $18.85 on Wednesday, while platinum inched up 0.1 percent to $954.26.

Palladium also edged up to 0.2 percent accounting into $2,108.31 an ounce. Therefore, it would be trading near an all-time peak of $2,108.8.

Gold price moving towards a high rise just before the wedding season period devastates the investors and retailers as this would not bring more returns for the gold medal. The sudden jump in prices will deter demand.

As experienced last year, when prices went up from Rs 31,000 per 10 gram to Rs 37,000 per 10 gram, the market had observed dullness in demand for a period of 5 to 6 months. The tensions and uncertainty this month might lead to the same predicament for the gold market this time around if prices climb further from its current level.

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GOLD PRICES MAY EXPERIENCE AN INCREASE IN 2020

As the New Year 2020, draws an alternate way for the gold business. The gold cost has encountered different changes from significant expenses to bring down costs in the year 2019 because of geopolitical issues and the impact of the China-US exchange tax issues. The cost of Gold went up to Rs. 45000 for 10 grams. As the financial hardships, rupee devaluation and the geopolitical emergency keeps on being clear.

These issues assume a significant job in the expansion in the cost of gold in the New Year. Additionally, different administrative arrangements, for example, the hallmarking of gold getting compulsory and the securities exchange spiraling towards an upward course affected the cost of gold in the year 2019.

The Reserve bank of India alongside a few Central banks added more tones of gold to their save.

Numerous uncertain issues and geopolitical restrictions may keep on manufacturing the fate of gold in the year 2020 has an answer is yet to move nearer for the business.

The contentions in the Middle East and the duty exchange strife between two of the greatest nations on the planet that is China and the USA will likewise have a gigantic effect on gold costs in the New Year. The degree of loan fees stays low which would affect stock costs to a degree and gold may turn into a place of refuge for speculators for 2020.

The less than ideal downpour that harmed harvests additionally added to the negative feeling that gold got, which was around 70 percent of the interest in India that involved the interest from provincial regions.

As gold makes due during vulnerabilities in the market, this New Year would keep on making more open doors for the gold market to prosper. The Reserve bank of India was perhaps the greatest purchaser of gold in 2019 with its stores expanding to more than 60 tons of gold.

The main portion of 2019 kick-began a generally increasingly alluring cost for shoppers at Rs 31,500-32,000 for 10 grams.

The worldwide monetary lull, liquidity emergency in India and devaluation of the rupee against the US dollar which has now arrived at Rs 71, and is probably going to increment to Rs 72 before long will realize a positive effect in the gold market. This year 2020, the gold costs will be in the scope of Rs 38,000 on the drawback and Rs 42,000 on the upside.

In the year 2019, a customer point of view on gold costs was blended. However, the year 2020 demonstrates to have an immense interest in realizing a positive future for the Gold market.

China and Russia lead to being the greatest purchasers of gold to date. Likewise, nations like Turkey, Poland and Kazakhstan have additionally joined the temporary fad in acquiring the yellow metal.

Prithviraj Kothari is the author of this article. Find more information about Prithviraj Kothari.

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INDIA IS BRINGING IN SYSTEMIC CHANGES TO THE GOLD JEWELLERY BUSINESS

In India, gold is the most popular jewellery purchased for different reasons especially during festivals, weddings or as gifts. The Gold industry is going to experience structural changes that will influence the Rs. 3 lakh crore jewellery businesses to transition into a new era. The unorganized sectors in the gold industry would have to shift to organized sectors. Many unorganized players in the gold market are venturing into new trading businesses after having their business slowly go into a lack of demand or loss. These players blame the Millenials of today for the backlash. A lot of the gold players that ruled the industry are disappearing one by one. They believe that the reasons are the youths always wanting something trendy and unique which has become hard to keep up with.

The gold market isn’t traditional anymore but competitive. India consumes 800 to 900 tonnes of gold per year. In 2005, organized or branded players had a 5% share of the gold jewellery market but now things are changing. As of 2016, the percentage went up to 30%. The organized players in the gold market are gaining more share as the years go by with 2019 boosting up their shares to 32 percent high.

It is expected to grow in the coming year, 2020. Their share is stated to increase to 45% which is close to the average amount of shares in the gold market. As the organized sectors of the gold industry grow, so will the unorganized sectors start diminishing.

The issue of unorganized jewelers diminishing in the market doesn’t just have to do with Millenials wanting new designs or are more aware of the purity of gold. But, many of the unorganized jewelers are not adapting to the evolving market. Consumers are shifting their buying references to organized jewelers because of the fact that they do offer new designs, understanding of the purity demand, trusted exchange policies and also the strict implementation of Goods and Service Tax (GST).

Consumers have explained that the unorganized jewelers are selling low-quality gold without issues proper bills. Most consumers today want to purchase their gold jewellery in white money and they are also aware of the hallmarking certification which small retailers don’t provide either.

Also, small retailers haven’t adapted to new technologies such as digital payment options, therefore this is also bringing in a loss. The working capital needed to run daily operations has also become difficult for small players in the gold market.

The import duty on gold has risen from 4% to 10% and recently it was at 12.5%, this is making it harder for the unorganized sectors to survive.

The artisans mostly have been affected in this changing era, as those who have been associated with the unorganized sectors have nowhere to go. They are either forced to choose another profession or go back to their villages. The same predicament goes for the small players, they are moving to other businesses such as fishing or B2B to invest their capital.

Prithviraj Kothari is the author of this article. Find more information about Prithviraj Kothari.

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Gold imports may dip 30% this month

Kolkata: Gold imports may fall about 30 percent in December from the previous month, following a drop in demand due to higher prices. In October, about 40 tonnes of gold were imported. Imports rose to 71 tonnes in November as domestic prices fell to ₹37,900/10 gm from ₹38,900. This followed indications that the US and China were closer to an interim trade deal after months of dispute.

Prices, however, rose earlier this month despite concerns ebbing over a prolonged US-China trade war, even as global investors await further clarity from “phase one” of the trade deal. Gold imports are expected to touch 50 tonnes in December, said Anantha Padmanabhan, chairman, All India Gem, and Jewellery Domestic Council. “If the price is stable, in the range of ₹38,000 to ₹39,000/10 gm, we expect 40-50 tonnes of demand for gold monthly in Dec-February,” said Prithviraj Kothari, president, Indian Bullion, and Jewellers’ Association & MD of RiddiSiddhi Bullions.

Bullion dealers are offering a discount of $3 per ounce to persuade jewellers to offload year-end stock. Analysts said demand for gold has been high on global economic growth concerns and an accommodative stance by central banks.

Read more at: https://economictimes.indiatimes.com/markets/commodities/news/gold-imports-may-dip-30-this-month/articleshow/72949062.cms

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Gold prices may scale new highs over global cues

Prithviraj Kothari explained that economic slowdown, liquidity crisis, and rupee depreciation are catalysts of the elevated prices of the yellow metal.

HYDERABAD: In 2019, gold prices hit an all-time high. There has not been any significant upswing in gold prices in the last four years, until 2019, when prices suddenly rose by 28 percent. The yellow metal remains one of the most trusted asset classes and interestingly, the one-year returns from gold exchange-traded funds too rose at about 14 percent, in line with the increase in prices of physical gold.

But what does 2020 hold for gold prices?

Experts believe that the precious metal will face a volatile year ahead, thanks to the ongoing US-China trade talks, US Presidential elections, and the Brexit outcome.

Globally, prices swung on weaker growth momentum, the trade war tensions and easing of monetary policies across economies. Incidentally, the equities hit a high in the US market and dollar continued to surge.

Analysts believe that geopolitical and economic risks will likely continue in 2020.

This will support gold prices, which is why they remain bullish on gold. For instance, both Goldman Sachs Group Inc and UBS Group AG see prices inching up to $1,600 an ounce, a level was last seen in 2013.

“The gold market will soon reach newer highs ideally in the next two-to-three years,” said Prithviraj Kothari, national president, India Bullion and Jewellers Association Ltd.

Kothari explained that economic slowdown, liquidity crisis, and rupee depreciation are catalysts of the elevated prices of the yellow metal.

“Currently, gold prices are around Rs 39,000 and I am positive that in 2020, they will be in the range of Rs 38,000 on the downside and Rs 42,000 on the upside,” Kothari added.

Lower imports from India and China, reflecting weaker consumer demand, are also adding to the rising surge in gold prices.

In 2019, Indians’ appetite for gold was at its lowest since 2016, as prices touched a record high of Rs 39,885 per 10 grams in early September, partly owing to higher import taxes and global factors.

Though prices have retreated since then, they continue to remain high by over 20 percent this year.

Credit: https://www.newindianexpress.com/business/2019/dec/23/gold-prices-may-scale-new-highs-over-global-cues-2079781.html

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PRESIDENT OF THE USA DONALD TRUMP IMPEACHMENT STEADIES GOLD PRICES IN THE GLOBAL MARKET: PRITHVIRAJ KOTHARI

Gold prices steady ahead in the midst of political uncertainty in the world’s largest economy. “The gold prices have benefited from the political indifferences occurring in the USA”, said Prithviraj Kothari. The US House of representatives voted the impeachment of Donald Trump.

Donald Trump becomes the third USA president to be impeached from the presidential post. The democratic house of the US charged Donald Trump with misuse and abuse of power. It is also on the counts of being an impediment for congress that the house decided to go forward with the impeachment proceedings. The house renders blame towards the President as the cause for rising tension that is deeply dividing the people of America.  In Prithviraj Kothari’s opinion, “The bullion is said to trade upward and it would recover from Rs. 37,800 towards Rs. 38,000. Silver also would be moving in the upward direction from Rs. 44,300 to Rs. 44,800”.

Prithviraj Kothari explained, “The US dollar eased a bit in comparison to other currencies after the new updates in the presidential decisions emerged”. Gold in the global market has gained momentum. The US elections next year are off in an unexpected direction. Any reduction in interest rates would decrease the cost of holding non-yielding gold. According to Prithviraj Kothari,” The sensitivity of gold towards any cutbacks in global interest rates is high”. The US economy is in a good position and has cut back on three interest rates this year. The US Federal Reserve bank plan to keep borrowing costs at a stable position is beneficial to the bullion market.

Gold futures went up to 0.05 percent at Rs 37,930 per 10 grams. While silver futures increased to 0.12 percent at Rs 44,502 per kg.

The impeachment updates are leaving a good space for gold to climb up in the trading market. The uncertainty in the US-China trade tariff might have a resolution soon with the status in the market getting better for bullion. It leaves a promising future for gold towards the end of this year, 2019. “Gold thrives with uncertainties and unpredictability within powerful economic sectors such as the US,” said Prithviraj Kothari.

On Tuesday, all metals such as gold, silver, palladium hit a high peak. The prices of palladium are close to breaking the normal rates for the first time which is at 2000 dollars per ounce.

Spot gold was up 0.1 percent at 1,477.15 dollars per ounce. US gold futures increased by up to 0.2 percent at 1,481.30 dollars per ounce.

Gold is often seen as an alternate option for investment as during political and financial uncertainty it grows steady in the global market. The cautious sentiment in the US economy supports the prices of the bullion.

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Here's how to check the purity of your gold jewellery

Majority of the gold that we buy in the form of jewellery is not certified for purity Gold jewellery has to be hallmarked to certify its purity, but how often do we take care of such details?

It's not uncommon to find people who realize their gold ornaments are not pure only when they go to sell them. The fact notwithstanding that Indians are the second biggest consumers of gold in the world, majority of the gold that we buy in the form of jewellery is not certified for purity. Gold jewellery has to be hallmarked to certify its purity, but how often do we take care of such details?

Well soon enough it may become the norm as the government is planning to make hallmarking of gold jewellery and artefacts compulsory from early next year. The government will issue a notification with regards to hallmarking of gold jewellery and artefacts on 15th January 2020, said Danve Raosaheb Dadarao, Minister of State for Consumer Affairs, Food and Public Distribution in a written reply in Rajya Sabha on 6th December.

“This move will benefit the consumers as hallmarking of jewellery will bring in transparency and bring in trust factor among the consumers as they can now be assured that the gold jewellery they are buying is certified for purity," siad Prithviraj Kothari, national president, India Bullion and Jeweller Association. Currently hallmarking of jewellery is voluntary and a very small percentage of jewellers sell hallmarked jewellery.

“Transparency is not there. A fair amount of impurities are being sold to the consumers right now. This move is in the right direction and was much needed," said Sandeep Kulhalli, senior vice president, retail and marketing, jewellery division, Titan Company Limited. According to Kothari, there are over three lakh jewellers and only around 30,000 are registered with the Bureau of Indian Standards. Bureau of Indian Standards (BIS) is the accreditation agency in India which certifies the assaying and hallmarking centers.

A jeweller needs to obtain a licence from BIS and after that it can get the jewellery hallmarked through any of the BIS recognised assaying and hallmarking centers. As on 31 Oct 2019, 877 assaying and hallmarking centres have been recognized by BIS.

How to check if your gold jewellery is pure

Many jewellers sell hallmarked jewellery. If you are holding a jewellery or planning to buy you can check beforehand if your jewellery is hallmark certified or not. Here's how.

First you need to understand that the purity of the yellow metal is measured in caratage. The gold in the purest form is of 24 carat, but it's not possible to make jewellery as 24 carat gold is too soft. Typically, jewellery is made from a gold whose purity ranges between 14K and 22K. Hallmarking of jewellery is done in three categories- 14k, 18k and 22K.

In percentage terms, 14k would mean 58.5 % purity (denoted by 585 ), 18k would mean 75% purity (denoted by 750) and 22k would mean 91.6% (denoted by 916) purity.

While buying a hallmarked jewellery, you need to look at four things-- BIS logo (a triangle), purity of gold (916 for 22carat gold), assaying or hallmarking center’s mark, and jeweller’s identification mark. This will usually be engraved in the ornament.

Hallmark is important to be assured of the purity and it's likely to become mandatory once the government comes up with a notification. So make it a habit to look for hallmark, after all you are buying some very expensive item that someday may become the family heirloom.

Credit: https://www.livemint.com/money/personal-finance/here-s-how-to-check-the-purity-of-your-gold-jewellery-11576034644400.html

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