Daily Market Update Report as on Thursday, September 27, 2018

Transcription

1 Daily Market Update Report as on Thursday, September 27, 2018 Gold Prices Hold $1,200 As Fed Raises Rates; Leaves Forward Guidance Relatively Unchanged: The gold market is seeing little reaction to the Fed as it tries to keep a steady hand at the till as long-term interest rates remain relatively unchanged. Yesterday in a widely expected move, the Fed raised interest rates by 25bps, bringing the federal funds rate to a range between 2.00% and 2.25%. U.S. interest rates are at their highest level in nearly a decade. The central bank was also optimistic on the U.S. economy, reiterating that economic activity has been rising at a strong rate." However, the gold market is expected to react to the Fed s guidance on future interest rates. The median average of the central bank s updated projections also referred to as the dot plots calls for long-term interest rates to rise to 3.00% up from June s forecast of 2.9%. Govt hikes import duty on 19 items : Prices of imported air conditioners, refrigerators and washing machines are set to go up as the government has doubled the duty on these items among others in order to reduce imports and rein in CAD. The government on Wednesday hiked customs duty on as many as 19 non-essential items including air conditioners, refrigerators, washing machines, footwear, diamonds, jewellery and jet fuel. It has, however, spared gold. The duty rate hike will be effective from Thursday. "The central government has taken tariff measures, by way of increase in the basic customs duty, to curb import of certain imported items. These changes aim at narrowing the CAD," the finance ministry said in a statement. The total value of imports of these items in was about Rs 86,000 crore. Central Bank Gold Purchases Now Control 10% Of The Total Market : Central Banks have become big players in the gold market and now control 10% of the total market demand. Now, this wasn't always the case. Just ten years ago, the Central Banks were main suppliers via their policy of dumping gold into the market. However, the Central Bank strategy to sell gold into the market to depress the price, had quite the opposite effect. The last year Central Banks sold gold into the market was in However, it was only 34 metric tons. Since 2010, Central Banks have been net purchasers of gold. Between 2010 and 2017, Central Banks purchased nearly 3,700 metric tons (mt) or a stunning 119 million oz of gold. World Gold Council to Submit Blue Print to Govt on Spot Exchanges - WGC would soon submit a blueprint to the government on spot exchanges, its managing director for India operations said at an ASSOCHAM event held in New Delhi. We have given a blueprint as a steering committee, we have drafted it and it is in the final stages, we will be releasing it very shortly, said Mr Somasundaram PR, managing director-india, WGC at an ASSOCHAM International Gold Summit. He added, This steering committee which has got all trade associations, key international banks and bullion banks and it was led by us, has been working on the spot exchange blueprint for last six-seven months, we have just now finalised what the spot exchange should be and we will be releasing that both to the government, policymakers and others. World Gold Council expects RBI's demand for gold to remain buoyant - The World Gold Council has said the Reserve Bank of India (RBI) has, since the start of 2017, been the fourth largest buyer of gold for adding to foreign exchange reserves. Russia, Turkey and Kazakhstan are the top three. Top 10 gold buyers since 2017 Globally, more and more central banks are buying gold for their forex reserves. In recent years, more central banks have entered the gold market. International Monetary Fund (IMF) data reveal Egypt recently bought gold for the first time since Date Gold* Silver* 25 Sep 2018 (Tuesday) Sep 2018 (Monday) Sep 2018 (Friday) The above rate are IBJA PM rates * Rates are exclusive of GST 25 Sep 2018 (Tuesday) Page 1

2 Outlook: Gold prices steadied up supported as investors looked for bargains after the metal fell to a two-week low in the previous session following a U.S. interest rate hike. For the day prices a drop towards will look to buy with a stoploss of below expecting prices to jump towards level. MCX GOLD Market View Daily Levels Open High Low Close Value Change % Change Margin Margin (Rs.) Volume Open Interest Cng in OI (%) Prev Value(Mln) 52 Week High 52 Week Low Resistance Support Spread DEC - OCT FEB - DEC Gold prices fell as the dollar strengthened ahead of the results of a Federal Reserve meeting that is expected to raise U.S. interest rates and hint at the outlook for future rate increases. The dollar steadied against its peers as the small boost it received from the U.S. Federal Reserve interest rate hike faded, with a decline in U.S. Treasury yields reducing support for the greenback. In a statement that marked the end of the era of accommodative monetary policy, the Fed raised interest rates on Wednesday and left intact its plans to steadily tighten monetary policy, as it forecast that the U.S. economy would enjoy at least three more years of growth. China on Wednesday unveiled plans to cut tariffs for products including machinery, electrical equipment and textile products beginning on Nov. 1, as the country braces for an escalating trade war with the United States. U.S. President Donald Trump on Wednesday accused China of seeking to meddle in the Nov. 6 U.S. congressional elections, saying Beijing did not want his Republican Party to do well because of his pugnacious stance on trade. Sales of new U.S. single-family homes rebounded in August after two straight monthly declines, but the underlying trend still pointed to a weakening housing market against the backdrop of rising mortgage rates and higher home prices. British Prime Minister Theresa May and U.S. President Donald Trump discussed their will to strike a big and ambitious trade deal after Britain s withdrawal from the European Union, May s office said on Wednesday. Technically now Gold is getting support at and below same could see a test of level, And resistance is now likely to be seen at 30747, a move above could see prices testing Page 2

3 INT. GOLD$ Market View Daily Levels Open High Low Close Value Change % Change Resistance Support Outlook: Gold price continues to fluctuate around the EMA50, and as long as the price is below , our bearish overview will remain active, as breaching this level will lead the price to achieve gains that reach mainly, while breaking represents the key to activate the negative effect of the triple top that has the ability to push the price towards our waited targets, starting at followed by Gold prices fell as the dollar strengthened ahead of the results of a Federal Reserve meeting that is expected to raise U.S. interest rates and hint at the outlook for future rate increases. The dollar steadied against its peers as the small boost it received from the U.S. Federal Reserve interest rate hike faded, with a decline in U.S. Treasury yields reducing support for the greenback. In a statement that marked the end of the era of accommodative monetary policy, the Fed raised interest rates on Wednesday and left intact its plans to steadily tighten monetary policy, as it forecast that the U.S. economy would enjoy at least three more years of growth. China on Wednesday unveiled plans to cut tariffs for products including machinery, electrical equipment and textile products beginning on Nov. 1, as the country braces for an escalating trade war with the United States. U.S. President Donald Trump on Wednesday accused China of seeking to meddle in the Nov. 6 U.S. congressional elections, saying Beijing did not want his Republican Party to do well because of his pugnacious stance on trade. Sales of new U.S. single-family homes rebounded in August after two straight monthly declines, but the underlying trend still pointed to a weakening housing market against the backdrop of rising mortgage rates and higher home prices. British Prime Minister Theresa May and U.S. President Donald Trump discussed their will to strike a big and ambitious trade deal after Britain s withdrawal from the European Union, May s office said on Wednesday. Technically now Gold is getting support at and below same could see a test of level, And resistance is now likely to be seen at , a move above could see prices testing Page 3

4 Indian rupee recovered by 8 paise to against the dollar on mild selling of the US currency by exporters amid easing crude oil prices. Weakness in the dollar against some global currencies overseas and a higher opening of the domestic equity market supported the rupee. Technically market is under fresh selling and getting support at and below same could see a test of level, And resistance is now likely to be seen at 73.02, a move above could see prices testing USDINR Market View Daily Levels Open High Low Close Value Change % Change Margin Margin (Rs.) Volume Open Interest Cng in OI (%) Prev Value(Mln) 52 Week High 52 Week Low Resistance Support Spread NOV - OCT DEC - NOV Rupee remained in range as market awaited the Federal Reserve monetary policy outcome wherein policy makers are expected to raise rates. Investors mainly focus on the US central bank's view on the economy as well as its guidance on the path of future rate hikes. The Fed already raised rates twice in 2018.The finance ministry wants the Reserve Bank of India (RBI) to consider more steps to improve liquidity in the system, including reducing the amount of funds banks must set aside with it, a senior ministry official said on Tuesday, amid a bubbling credit crunch in the Indian shadow banking industry. The RBI could also explore buying more bonds from the open market and open a special window for mutual funds to inject liquidity, the official told reporters. Prime Minister Narendra Modi s government faces a new challenge that could derail growth at a time when surging fuel costs and a slumping rupee are buffeting the world s fastest growing major economy. The Reserve Bank of India is likely to raise interest rates in early October, despite relatively tame inflation, to prop up a retreating rupee. In an abrupt change from the last survey conducted two months ago, which predicted rates would stay on hold until this quarter next year. Slightly over half said RBI Governor Urjit Patel and the Monetary Policy Committee would deliver a 25-basis-point rise to 6.75 percent at the Oct. 5 policy meeting, with one economist calling for a 50-basis-point rise. Technically now USDINR is getting support at and below same could see a test of level, And resistance is now likely to be seen at , a move above could see prices testing Page 4

5 Gold Spot 995 Gold Spot 999 Exch. Descr. Last* Exch. Descr. Last* CMDTY Gold Ahmedabad CMDTY Gold Ahmedabad CMDTY Gold Bangalore CMDTY Gold Bangalore CMDTY Gold Chennai CMDTY Gold Chennai CMDTY Gold Cochin CMDTY Gold Cochin CMDTY Gold Delhi CMDTY Gold Delhi CMDTY Gold Hyderabad CMDTY Gold Hyderabad CMDTY Gold Jaipur CMDTY Gold Jaipur CMDTY Gold Kolkata CMDTY Gold Mumbai CMDTY Gold Mumbai * Rates including GST * Rates including GST Silver Spot 999 Bullion Futures on MCX Exch. Descr. Last* Exch. Descr. Last CMDTY Silver Ahmedabad MCX GOLD 04AUG CMDTY Silver Bangalore MCX GOLD 05OCT CMDTY Silver Chennai MCX GOLD 05DEC CMDTY Silver Delhi MCX SILVER 05JUL CMDTY Silver Hyderabad MCX SILVER 05SEP CMDTY Silver Jaipur MCX SILVER 05DEC CMDTY Silver Kolkata CMDTY Silver Mumbai * Rates including GST Bullion Futures on DGCX Gold and Silver Fix Exch. Descr. Last Exch. Descr. Last DGCX GOLD 28NOV CMDTY Gold London AM FIX DGCX GOLD 29JAN CMDTY Gold London PM FIX DGCX GOLD QUANTO 27SEP CMDTY Silver London FIX DGCX GOLD QUANTO 29NOV DGCX SILVER 28NOV Gold / Silver Ratio DGCX SILVER 26FEB Exch. Descr. Last DGCX SILVER QUANTO 29NOV INTL. SPOT GOLD SILVER RATIO MCX MCX GOLD SILVER RATIO Page 5

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