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 2017-18 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 2009. 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 1978. Date Gold* Silver* 25 Sep 2018 (Tuesday) 30905.00 37135.00 24 Sep 2018 (Monday) 30855.00 37195.00 21 Sep 2018 (Friday) 30840.00 37035.00 The above rate are IBJA PM rates * Rates are exclusive of GST 25 Sep 2018 (Tuesday) Page 1
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 30570-30520 will look to buy with a stoploss of below 30450 expecting prices to jump towards 30680-30780 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 30800.00 30810.00 30567.00 30593.00-226.00-0.73 5.00 152965 10008.00 4689.00-19.60 30717.05 31963.00 29268.00 Resistance 30990.00 30900.00 30747.00 30504.00 30414.00 30261.00 Support Spread DEC - OCT 312.00 FEB - DEC 286.00 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 30504 and below same could see a test of 30414 level, And resistance is now likely to be seen at 30747, a move above could see prices testing 30900. Page 2
INT. GOLD$ Market View Daily Levels Open High Low Close Value Change % Change 1201.00 1202.26 1191.45 1194.27-6.74-0.01 Resistance 1211.35 1206.80 1200.54 1189.73 1185.18 1178.92 Support Outlook: Gold price continues to fluctuate around the EMA50, and as long as the price is below 1208.40, our bearish overview will remain active, as breaching this level will lead the price to achieve gains that reach 1238.30 mainly, while breaking 1190.00 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 1180.00 followed by 1174. 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 1195.20 and below same could see a test of 1190.80 level, And resistance is now likely to be seen at 1205.20, a move above could see prices testing 1210.00. Page 3
Indian rupee recovered by 8 paise to 72.61 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 72.79 and below same could see a test of 72.45 level, And resistance is now likely to be seen at 73.02, a move above could see prices testing 73.18. 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 73.0100 73.0575 72.8250 72.8925-0.1125-0.15 2.51 1830 3006689 2326485 23.48 219344.53 73.3425 64.6000 Resistance 73.26 73.16 73.03 72.79 72.69 72.56 Support Spread NOV - OCT 0.3025 DEC - NOV 0.2825 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 72.7425 and below same could see a test of 72.6675 level, And resistance is now likely to be seen at 72.975, a move above could see prices testing 73.1325. Page 4
Gold Spot 995 Gold Spot 999 Exch. Descr. Last* Exch. Descr. Last* CMDTY Gold 995 - Ahmedabad 31590.00 CMDTY Gold 999 - Ahmedabad 31720.00 CMDTY Gold 995 - Bangalore 31600.00 CMDTY Gold 999 - Bangalore 31750.00 CMDTY Gold 995 - Chennai 31605.00 CMDTY Gold 999 - Chennai 31755.00 CMDTY Gold 995 - Cochin 31605.00 CMDTY Gold 999 - Cochin 31755.00 CMDTY Gold 995 - Delhi 31600.00 CMDTY Gold 999 - Delhi 31750.00 CMDTY Gold 995 - Hyderabad 31580.00 CMDTY Gold 999 - Hyderabad 31730.00 CMDTY Gold 995 - Jaipur 31595.00 CMDTY Gold 999 - Jaipur 31715.00 CMDTY Gold 995 - Kolkata 31650.00 CMDTY Gold 999 - Mumbai 31750.00 CMDTY Gold 995 - Mumbai 31600.00 * Rates including GST * Rates including GST Silver Spot 999 Bullion Futures on MCX Exch. Descr. Last* Exch. Descr. Last CMDTY Silver 999 - Ahmedabad 38200.00 MCX GOLD 04AUG2017 30593.00 CMDTY Silver 999 - Bangalore 38605.00 MCX GOLD 05OCT2017 30905.00 CMDTY Silver 999 - Chennai 38580.00 MCX GOLD 05DEC2017 31191.00 CMDTY Silver 999 - Delhi 38580.00 MCX SILVER 05JUL2017 37866.00 CMDTY Silver 999 - Hyderabad 38680.00 MCX SILVER 05SEP2017 38669.00 CMDTY Silver 999 - Jaipur 38580.00 MCX SILVER 05DEC2017 39195.00 CMDTY Silver 999 - Kolkata 38750.00 CMDTY Silver 999 - Mumbai 38650.00 * Rates including GST Bullion Futures on DGCX Gold and Silver Fix Exch. Descr. Last Exch. Descr. Last DGCX GOLD 28NOV2018 1202.30 CMDTY Gold London AM FIX 1341.05 DGCX GOLD 29JAN2019 1203.60 CMDTY Gold London PM FIX 1341.05 DGCX GOLD QUANTO 27SEP2018 30565.00 CMDTY Silver London FIX 16.45 DGCX GOLD QUANTO 29NOV2018 30986.00 DGCX SILVER 28NOV2018 14.40 Gold / Silver Ratio DGCX SILVER 26FEB2019 14.45 Exch. Descr. Last DGCX SILVER QUANTO 29NOV2018 41189.00 INTL. SPOT GOLD SILVER RATIO 83.04 MCX MCX GOLD SILVER RATIO 80.79 Page 5
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