Daily Market Update Report as on Monday, October 29, 2018

Transcription

1 Daily Market Update Report as on Monday, October 29, 2018 Gold moved higher on Friday and recorded their fourth successive weekly gain, as falling equities prompted investors to seek the safe haven asset. With worries about trade war and its likely impact on global economic growth rising by the day, and geopolitical concerns, falling corporate earnings and Italian budgetary woes further denting sentiment, stock markets across the globe have been witnessing some big slides in recent sessions. The U.S. dollar is gaining in strength as a safe haven investment after the Federal Reserve hinted at another rate hike this year and three more increases in the coming year. Although the greenback's rise has pushed the yellow metal down a bit, the latter is still managing to push itself higher and has come a long way up since it fell to an 18-month low of $1, in mid August this year. Gold hits six-year high of Rs 32,625 per 10g over festive season demands - Continuing its upward march for yet another week, gold prices zoomed to hit over six-year high of Rs 32,625, and finally settled at Rs 32,550 per 10 grams on Saturday, supported by pick up in festive and wedding season demand by local jewellers. Silver, on the other had, after moving in a narrow range on scattered buying and selling, finally ended flat at Rs 39,600 per kg. Bullion traders said sentiments were also buoyant on firming trend in global markets where gold surged to over three-month high as the dollar eased and equity markets skidded to multi-months low. Demand for Gold Up 42%. Why Are Central Banks Raising Their Reserves? - Since 2010, central banks around the world turned from being net sellers of gold to net buyers of gold. In fact, the World Gold Council (WGC) has shown that demand for gold in the first quarter of 2018 was up 42% year on year. While we can t know for certain, there are some statistics that prove to be quite interesting. For example, the Russian central bank has been the largest purchaser of gold for the past six years, which has taken their holdings to 224 tonnes in They have now also overtaken China to hold the fifth spot in having the largest gold reserves in the world. Why Chinese investors could benefit from Gold? - Gold is a proven investment asset, capable of reducing portfolio risk and boosting returns. As such, Chinese investors could benefit from allocating some of their portfolio assets to gold, as WGC Director of Investment Fred Yang explains. China s investors have faced a challenging time this year, hit by falling prices in both equity and corporate bond markets. China s leading index, the CSI 300, has underperformed the MSCI World Index by around 20% since 1 January At the same time, the credit spread between AA+ corporate bonds and the quasisovereign China Development Bank bond has ballooned to more than 200bps, highlighting concerns about prospects for domestic companies. Pre-Dhanteras high prices, cash crunch take sheen off gold this season - Gold is likely to lose its sheen this 'Dhanteras' due to liquidity crunch amidst rising prices and other investment options, say market experts and the industry. If the sluggish sentiment prevails this will be the second consecutive year of poor sales. In 2017, the Dhanteras season saw sales plunging more than 30 per cent over the 2016 levels when sales were reasonably good as the note ban was announced post Diwali. But last year was one of the worst for the industry in recent years as it was after the note ban and GST implementation coupled with tighter KYC norms for high value purchases. Date Gold* Silver* 26 Oct 2018 (Friday) Oct 2018 (Thursday) Oct 2018 (Wednesday) The above rate are IBJA PM rates * Rates are exclusive of GST 26 Oct 2018 (Friday) Page 1

2 Outlook: Gold prices steadied as the dollar firmed and Asian stocks edged up after setbacks last week. 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 FEB - DEC APR - FEB Gold on MCX settled up 0.24% at as nervous investors retreated from stock markets and piled into the precious metal seen as a refuge from financial turmoil. U.S. economic growth slowed in the third quarter, but posted a better-than-expected reading that left the American economy on track to post its best annual expansion in 13 years. In a report, the Bureau of Economic Analysis said that GDP registered a seasonally-adjusted annual rate of 3.5% growth in the three month period from July to September, cooling from growth of 4.2%, which was the strongest reading in four years. The reading beat consensus expectations for an expansion of 3.3% and left the U.S. economy on track to register 3% growth for the year as a whole, which would be the strongest outcome since Investor flows into bullion, often considered a safe haven and store of value during times of financial, economic and geopolitical uncertainties, can be seen by the rise in holdings of physically-backed exchange traded products. Gold demand in India in the week was muted as a recent rally in domestic prices prompted buyers to postpone purchases despite the approaching festival and wedding season. Dealers in India were offering a discount of up to $7 an ounce over official domestic prices this week, unchanged from the last week and the highest since mid-june. Holdings in the SPDR Gold Trust, saw outflows of about 4.5 million ounces between late April and early October. But now at 24.1 million ounces, holdings are at their highest since the end of August. 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 32133, 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 attempted to breach level but it couldn t hold settle it, to continue fluctuating near this level, and the bullish trend scenario still active depending on the price stability above , supported by the EMA50 that carries the price from below, reminding you that our extended target reaches Gold settled up as nervous investors retreated from stock markets and piled into the precious metal seen as a refuge from financial turmoil. U.S. economic growth slowed in the third quarter, but posted a better-than-expected reading that left the American economy on track to post its best annual expansion in 13 years. In a report, the Bureau of Economic Analysis said that GDP registered a seasonally-adjusted annual rate of 3.5% growth in the three month period from July to September, cooling from growth of 4.2%, which was the strongest reading in four years. The reading beat consensus expectations for an expansion of 3.3% and left the U.S. economy on track to register 3% growth for the year as a whole, which would be the strongest outcome since Investor flows into bullion, often considered a safe haven and store of value during times of financial, economic and geopolitical uncertainties, can be seen by the rise in holdings of physically-backed exchange traded products. Gold demand in India in the week was muted as a recent rally in domestic prices prompted buyers to postpone purchases despite the approaching festival and wedding season. Dealers in India were offering a discount of up to $7 an ounce over official domestic prices this week, unchanged from the last week and the highest since mid-june. Holdings in the SPDR Gold Trust, saw outflows of about 4.5 million ounces between late April and early October. But now at 24.1 million ounces, holdings are at their highest since the end of August. 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 The rupee, somehow, managed to recover some grounds against the dollar during the week, ended on Oct 27, The rupee gained Rs 1.35 in terms of the dollar for buying and selling at Rs and Rs Foreign investors have pulled out a massive Rs 356 billion (about $5 billion) from the Indian capital markets this month on concerns over rupee depreciation, global trade war tiff and rising crude prices. Technically market is getting support at and below same could see a test of level, And resistance is now likely to be seen at 73.48, 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 ended lower on month-end dollar demand by oil importers amid overseas funds outflow from local stocks. Globally investors are risk averse and are trimming their holding in Emerging economics due to Sino-US trade conflict, mixed bag of corporate earnings, Fed rate hikes and Italy's budget woes. However, offsetting the impact of these negativities is the further slide in Brent crude oil prices after Saudi Arabia said there would be oversupply of oil this year. The Reserve Bank of India awarded cutoff yield in line with market expectation for the four gilts auctioned earlier in the day. The RBI awarded cutoff yield of % for the 7.37%-2023 gilt, % for the 7.95%-2032, % for the 7.40%-2035 and 8.28% for the 8.13%-2045 gilt at the auction held earlier. The Reserve Bank of India s monetary policy committee sees a risk of rising headline inflation from high crude oil prices and a weak rupee, indicating potential rate hikes ahead even as it held rates unchanged at its last meeting. Minutes of RBI s monetary policy committee s (MPC) October meeting, showed most committee members highlighted the upside risks to inflation while preferring to wait for greater clarity on price pressures. India s retail inflation rose marginally in September, nudged up by food and fuel prices, but short of the Reserve Bank of India s 4 percent medium-term target, strengthening views it could tighten monetary policy in December following unchanged rates last week. 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 29NOV CMDTY Silver London FIX DGCX GOLD QUANTO 30JAN 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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