Gold had a virtual rollercoaster ride in 2016. From the lows of January 2016, gold rallied nearly 30% before giving up a chunk of the gains in the light of Trump’s aggressive growth pitch. Economic growth and gold prices rarely go hand in hand. Gold is a parasitic asset class that typically thrives when there are question marks over other asset classes. So what does gold hold for the year 2017? Continue reading
Will 2016 see a revival in the price of gold?
It is after a very long time that the price of gold has seen a consistent rise for 9 successive trading sessions. After touching a low of $1050/oz and threatening to fall below the $1000 mark, gold registered smart gains to cross and settle above the $1100 mark. Is this a sustainable rally in gold prices, or is it just another false rally like the many cases we saw post 2011? Continue reading
A contrarian take; on why the worst may be over…
Frankly, it is hard to see a bullish report on gold in the global scenario. Let us look at gold prices in dollar terms. Between August 2011 and August 2015, the dollar price of gold has fallen from $1900 / troy oz to below $1100 / troy oz. As if this 45% fall was not enough, most market analysts are predicting that gold will go below the psychological level of $1000 / troy oz. While it is hard to comment on levels, there is a strong possibility that gold may begin the process of bottoming out. Let us bust a few myths about gold. Continue reading
by- Sugandha Sachdeva | AVP & Incharge- Metals, Energy & Currency Research at Religare Securities Limited
With gold prices slipping to new five year lows, the sentiments have once again turned quite bearish. After respecting the psychological level of Rs.25000/10gms at domestic bourses for a long time, prices have eventually breached the same, reflecting the lack of demand for the precious metal and unwinding of safe haven bets. In international markets too, the prices have plunged sharply and are trading below $1100 per ounce, significantly down from the all-time highs of $1920 per ounce. The universal safe haven asset has also failed to attract investors during the recent turmoil emerging out of Greece debt talks and the jitters in Chinese equity markets. So does that infer that prices may head further lower since the investors look in no hurry to take advantage of the lower prices? Well, the fundamentals are indicating something that’s not divergent from this thought ! Continue reading
The price of gold has been on a virtual downtrend since September 2011. Of course, we are referring to gold in dollar terms. From a high of $1900 / troy oz it has fallen closer to $1100 / troy oz in a span of 4 years. There are a variety of reasons attributed for the end of gold as an alternate currency. Firstly, the dollar has been on a constant tear and typically the US dollar has been negatively correlated to the price of gold. Secondly, with the entry of ETFs large global ETFs like SPDR have started holding over 1300 tonnes of gold to back their gold ETF units. One needs to remember that SPDR today is the 6th largest gold holder. This investment demand has created volatility in the price of gold. Continue reading