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FutureStarrLatest Gold News World's Economy Slows & Central Banks React
As the world's economy slows and central banks react by raising interest rates, gold prices have been under pressure. The US dollar recently hit a 20-year high and Treasury yields surged above 3.3%, sending gold prices down to near two-month lows. The US Federal Reserve appears poised to continue aggressively hiking interest rates in the near future. Fed chair Jerome Powell has stated that the central bank will use its tools forcefully to combat inflation. The central bank is widely expected to raise rates at its next FOMC meeting.
After gaining nearly half of its advance in the last two weeks, gold is likely to see a dip, as the stronger dollar and rising U.S. equity markets have dampened demand. In addition, the Federal Reserve is widely expected to raise interest rates again in December, citing a robust US economy and rising inflation. Consequently, the market is likely to test support at $1211 an ounce and then may fall back towards the $1202 level.
The gold price climbed on Thursday, as the dollar slumped to a one-week low. This made gold cheaper to other currencies, which is a good sign for gold investors. The price of gold also rose due to worries that the Federal Reserve might raise interest rates, which would increase the opportunity cost of holding it. Additionally, Wall Street indexes declined on Thursday, led by Big Tech stocks.
Gold has climbed in price in recent weeks because of growing demand for the precious metal, as well as its increasing role as a hedge against currency devaluation and inflation. It is used as an investment by many countries, including central banks. The price has also been driven by global geopolitical tensions.
Another important factor that drives the gold price is the value of the dollar. Because gold is denominated in dollars, a stronger dollar makes gold more expensive to foreign buyers. Similarly, a weak dollar makes gold cheaper to foreign buyers. However, if the dollar becomes stronger, gold prices may fall.
Gold's price is falling, as the US dollar is strengthening. The Fed has made hawkish bets, and a strengthening dollar drowns the gold price. Meanwhile, metal bears have hope that firmer yields will boost the gold price.
Gold's price is testing a support level below $1,660. A breakdown below this level could send gold prices lower to $1,600. The May 2020 low is the next major support level, and it's currently just below the $1,700 prior support level.
The XAU/USD is a reliable gold trading pair due to its low volatility in one-minute time frames. Unlike the currency markets, gold has more stable trends and fewer intraday reversals. This makes it easy to day trade gold using a low-risk strategy. The gold market is very sensitive to fundamental factors. For example, daily movements can expand by 2500 or more points, and they can also expand in the opposite direction of a trader's position.
Gold has recently gained popularity, both as a hedge against other investments and as a safe-haven. It is more stable over time than other currencies and is a safe haven during periods of inflation. Many forex brokers now offer gold pairings.
The inverse relationship between gold and the USD means that when the dollar is struggling, gold prices tend to rise. This is because when the USD is underperforming, traders and investors turn to other investments. Gold is a popular safe-haven and performs well in times of geopolitical upheaval.
In order to profit from trading in gold, traders must focus on fundamental factors and price behavior. XAU/USD can move more than other currencies, which is why it is important to learn about fundamentals and apply them to your trading strategy. Remember, it is also important to know how to place trailing stops to lock in profits.
Technical analysis can help traders identify buying opportunities and identify short-term trades. By examining historical performance, traders can use technical indicators to find gold trading opportunities and avoid risks. Using technical indicators, like volatility and liquidity, can help them identify potential buy and sell opportunities.
Another important factor to look for in gold is the interest rate. When the real interest rate falls below 1%, gold prices tend to rise. When it exceeds 2%, gold will likely depreciate. That's why many experts recommend selling gold when the real interest rate is over 2%.
Gold has long been considered a safe-haven asset for investors. While the price does not fluctuate much, gold has historically maintained its value in difficult economic times. During the 2008 global financial crisis, investors sought out gold as a safe-haven asset. This resulted in the gold price rising 24% in 2009, and it continued this upward trajectory into 2011.
Pan African Resources has a diverse portfolio of projects. Its investors include Shanduka, Allan Gray Investment Management, Fidelity Worldwide Investment, Truffle Asset Management and Old Mutual Investment Group. Its shareholders are focused on sustainability and social responsibility. Read about some of the company's sustainable practices.
Pan African Resources is a mid-tier African focused gold producer with a production capacity of more than 170,000 ounces per year. Its portfolio of high-quality operations is located primarily in South Africa. Its management is focused on balancing its financial goals with its people's well-being. As such, it is committed to sustainability and never compromises on the safety of its employees or the environment.
Pan African Resources PLC is an African-focused mid-tier gold producer with a capacity of 170,000 oz per year. Its operations are characterized by low cash costs and high grade ore bodies. In addition, it has a long history of providing cash returns to shareholders.
The company's Mogale Gold Project is expected to generate more than 50 000 ounces per year. It is expected to be profitable within 18-24 months. It is anticipated that the re-mining of Mogale's TSFs will add around 25% to Pan African's current output.
The company is committed to sustainability and employs local communities in its operations. It has recently completed feasibility studies for two large-scale solar PV projects in the region. These will save the company R100 million annually and result in 80,000 tonnes of CO2 emissions reduction annually. Moreover, the company is also investing in community and environmental projects.
Pan African Resources PLC, the Rosebank-based gold producer, has extended the closing date for the acquisition of Mogale Gold and the Mintails mine in South Africa. In November, Pan African signed a conditional agreement to purchase both Mogale Gold and the Soweto Cluster. Pan African has until August 2022 to complete due diligence, including a prefeasibility study and fatal flaw analysis.
Pan African Resources is a mid-tier African-focused gold producer. Its shares trade on both the JSE and the LSE. In addition, it has an ADR programme sponsored by Bank of New York Mellon that will trade on the OTCQX Best Market in the U.S. Pan African owns and operates a number of high-quality South African operations that are capable of producing 200 000oz of gold annually.
Mogale Gold has tailings storage facilities that contain a probable mineral reserve of 123.6 million tons of gold at 0.29 g/t. The mine has upside potential from the Soweto Cluster resource, which could extend the mine life. Mogale's carbon-in-leach plant envisages a throughput of 800 000 to 1.2 million tonnes per month.
The company also has a mining infrastructure that includes tailings recovery plants. The first plant, at Barberton, paid for itself within eighteen months. The second plant, at Evander, paid for itself in three years. The third plant, at Elikhulu, is expected to pay for itself in around 120 months. Pan African is also looking to expand the project into adjacent areas.
Pan African Resources is a South African company with shares listed on the Johannesburg Stock Exchange. It is involved in the Mining and Basic Materials sectors. Below is a list of Pan African Resources' top 10 market competitors by year-to-date performance. The company has a market capitalisation of about R3 billion.
Pan African Resources is a mid-tier African gold producer with the capacity to produce around 170,000 ounces of gold per year. Its focus on high-grade ore bodies has lowered its cost base, and it has grown its gold production in recent years. The company produces gold both from underground operations and surface tailings. It has one of the lowest cash costs of any gold producer in Southern Africa. The company also has a strong balance sheet and a track record of providing cash returns to shareholders.
The company's Barberton tailings retreatment plant has already paid for itself, and it expects to be profitable within three years. The company is exploring alternative energy projects such as agrivoltaics, which can make use of abandoned mine sites and create jobs. It has also been featured on CleanTechnica several times.
The South African gold mining industry has experienced a boom in the last decade. The country's gold production peaked at 450 tonnes in 1941, and increased to 950 tonnes by 1965, and it is the second-largest producer in Africa, after Ghana. It accounts for around four percent of global gold production.
As a responsible mining company, Pan African Resources is committed to achieving sustainable development. The company has pledged more than R100 million for ESG and community projects over the next five years. It is also working to restore land that was used for mining operations and has rehabilitated mine hostel sites.
In South Africa, the mining industry is one of the largest contributors to the GDP and employs a significant number of people. Unfortunately, it is also a major user of electricity and has high CO2 emissions. By increasing adoption of large-scale solar power, the mining sector can save significant amounts of money while reducing CO2 emissions.
Among the company's other sustainability initiatives is the development of a solar photovoltaic plant, which will supply 30% of the power needs at Elikhulu Tailings Retreatment Plant during the day. This will reduce the dependence on the national grid, which will ultimately lead to cost savings.
A key goal of the company's climate action initiatives is to improve local economies and help develop sustainable communities. This includes ensuring the protection of biodiversity and restoring lands. By doing so, the company can contribute to regional development, social cohesion, and economic growth. At the same time, its projects promote sustainable development by creating employment opportunities.
The Sahel region has vast amounts of human, cultural, and natural resources. With over 300 million people and a trend towards urbanization, the region has immense potential for economic diversification, value chain development, and livelihood improvement. However, the region is facing significant challenges, including environmental degradation, drought, and desertification.
The annual results for Pan African Resources for the year ended December 31, 2018, showed that the company achieved an increase in net cash from operating activities of 45.1% and reported headline earnings of US$75.0 million. As a result, the company reported earnings per share of US 3.90 cents. Net debt amounted to US$39.0 million and was up 44.1% from last year.
Pan African Resources is a mid-tier African focused gold producer with the capacity to produce 170,000 oz gold per year. It has a portfolio of high-quality, low-cost operations in South Africa. The company has a strong focus on sustainability, balancing financial goals with the needs of its people. It is committed to environmental protection and safety and never compromises either of these priorities.
The financial data of PAN AFRICAN is useful for investors and analysts to assess the company's performance. Despite the company's high-quality management and stringent outside auditors, there are still risks associated with earnings manipulation. Therefore, it is essential to keep a skeptical eye on PAN AFRICAN RESOURCES' financial statements.
Pan African Resources PLC is a mining company in South Africa. The company's Barberton gold project includes three underground mines. The company is headquartered in Johannesburg, South Africa.
Pan African Resource PLC (PAN) is an issuer of stock on the Johannesburg Stock Exchange. It is a company in the Mining and Basic Materials sector. The company's shares have fluctuated significantly over the past three months. On average, the company has traded 3.13 million shares per day, ranging from a high of 11 million shares on July 7th to a low of 422,842 shares on August 29th. Its share price has decreased by 5% since August 22nd.
The company operates three underground mines in South Africa and earns revenue from gold mining. It also has projects for expansion. It is headquartered in Johannesburg, South Africa. Its assets include the Barberton gold project, which consists of three underground mines. The company also generates revenue through the provision of management and administrative services.
The company has a strong financial position, which supports its growth. It also has an effective cost control structure. Pan African Resources is well-positioned to increase gold production. The company has recently invested in development capital expenditure at its Evander Mines project and in its coal mines in Mpumalanga and the North West.
Pan African Resources is a gold producer in South Africa, focusing on high-grade ore bodies with low costs. Its low cost base has allowed it to increase its gold production in recent years. It has a solid balance sheet and a long history of providing cash to shareholders.
The recent gold price dip has many investors concerned about their wealth. The drop comes as the Fed is signaling higher interest rates and bitcoin is growing in popularity. But other factors could be affecting the price of gold. Among them are rising inflation expectations, rising Treasury yields, and expectations of future rate hikes by the Fed. If these conditions were not present, the price of gold would be likely to fall.
While gold has been a popular safe haven, it is not a perfect asset to invest in. Its price has dropped in recent weeks, but this doesn't necessarily mean it's going to stay there. The Fed is expected to raise interest rates sooner than anticipated to control inflation, and this could hurt gold's value. It may also lead to a stronger dollar, which will lower the price of gold.
Despite recent price declines, some investors continue to believe in gold as a hedge against rising inflation and market volatility. In fact, some veteran investors see it as a portfolio protection. According to Goldman Sachs commodities chief Jeffrey Currie, gold may drop below $1,000 an ounce for the first time since 2009.
While the recent dip in gold's price is not the only factor that could affect the price of gold, investors should not forget that the recent tensions in the Ukraine and tensions in Taiwan are both highly bullish for gold. These issues make gold more attractive to investors, who tend to be more risk averse than traditional investments.
A looming war in Ukraine is a major worry for many investors. The threat of war has prompted many to sell stocks and turn to gold as a safe haven. The stock market plunged during the Covid-19 pandemic in Ukraine, and the price of gold spiked after Russia invaded the country.
The recent gold price dip is causing some investors to be nervous. Although interest rates have been at historically low levels for several years, some experts think the recent dip could be a sign that the Federal Reserve will raise rates in the near future. Higher interest rates tend to dampen demand for hard assets, such as gold.
Gold may be under pressure due to rising inflation expectations, which is weighing on the dollar. Higher interest rates would raise the cost of storing gold and would also dampen the appeal of its safe-haven status. On the other hand, if the economy begins to improve, gold would likely appreciate in value as demand from investors would increase.
Gold is an excellent way to invest in the world's most valuable commodity. Many experts believe it is a hedge against negative real interest rates and global bond markets. With over $10 trillion of global sovereign debt yielding negative returns, gold is a good way to protect against inflation.
Other gold price dips have occurred in the past few months, and they are often accompanied by an increase in inflation. However, in some cases, it is hard to tell. There are many variables that can make gold prices rise or fall. One of the most important factors is the Federal Reserve's ability to raise interest rates in a timely fashion. By increasing the target interest rate, the Fed would not only help the economy grow faster but also help investors protect their assets from inflation.
Despite the recent dip, some analysts remain optimistic about the price of gold. Goldman Sachs, for example, recently raised their gold price forecasts for the next three, six and twelve months. This suggests that gold may hit 1,410 US dollars per ounce by the end of this year. Goldman Sachs says that the U.S. dollar gold price could hit $1,350 US dollars an ounce by the end of next year.
If you are looking to invest in a safe haven and are concerned about inflation, Bitcoin is a great choice. Its price has risen more than 1,000 percent in the last three years. Its adoption is also growing at an impressive rate, according to a CoinShares report. The number of people using Bitcoin is estimated to reach one billion by 2024. By 2030, it is estimated that the number of users will increase to four billion.
The growth in Bitcoin is fueled by increasing adoption and interest from businesses and investors. Major companies such as PayPal, Starbucks, and AT&T have begun accepting bitcoin. This is good news for the cryptocurrency market, and it should help it gain acceptance among individual traders. There are numerous platforms, such as Coinbase and Kraken, which allow people to buy and sell cryptocurrencies. Other brokerages, such as Robinhood, are also jumping on board.
Bitcoin is being hailed by its proponents as a portfolio diversifier, yet it is unclear whether its price will continue to rise or fall alongside broader markets. It is often seen as a modern gold alternative. While this is true, Bitcoin is fundamentally different from gold. It has a higher correlation to equities, which makes it a better option than gold in times of market stress.
Bitcoin prices have increased as gold prices have fallen. This is partly due to a covid-19 virus that has put the world economy into a deep recession. The Federal Reserve has taken steps to reduce interest rates, and quantitative easing has taken place in some of the world's largest economies. While the Covid virus has caused a major recession, the Fed has been lowering interest rates, which are beneficial for gold.
One of the reasons for the recent dip in gold prices has been the rising interest rates. This has tended to lower the price of gold and boost the dollar, which has traditionally been sensitive to changes in interest rates. Rising rates also make stocks and government bonds more attractive than gold, and higher interest rates have also weakened the value of other hard assets. The price of gold, however, is influenced by a variety of other factors, such as gold ETF inflows.
Rising interest rates have a strong correlation with gold. The Federal Reserve is looking to raise interest rates sooner than expected in an effort to curb inflation, and gold historically serves as an inflation hedge. This has led to a sharp drop in gold prices, which recently hit a two-month low. As a result, gold prices may be set for a reversal.
When real interest rates rise, investors are more likely to look for alternatives. But the relationship between gold and interest rates is not as dependable as it used to be. This is partly because gold is considered an outdated asset in the exponential era and is often overlooked when times are uncertain.
The real interest rate is a significant influence on the price of gold, as it is associated with changes in the real GDP of the world. The increase in real world GDP also implies that demand for gold services has increased along with other goods and services. An estimated coefficient based on ten-year Treasury yield minus PTR shows that every percentage point rise in real interest rates lowers the price of gold by 13.1%. But it is worth noting that the PTR has an additional and stronger quantitative effect on gold than the real rate.
While gold prices are not completely dependent on real interest rates, they are sensitive to them. Historically, gold has benefited from rising rates. The price of gold has been trending between $1700 and $1900 for over a year. If this trend continues, it may be a catalyst for another bull run.
The recent gold price dip could be a sign that investors are losing faith in the stability of fiat currencies. In addition to its stability, gold is also a universally recognized form of currency. Moreover, it has a stable supply, which makes it a good choice for protecting investments from economic turbulence.
However, some experts still believe that the recent dip in gold's price is a result of a decline in its safe haven status. A recent report from Bank of America estimates that gold could reach US$ 3,000 in 18 months, despite the fact that interest rates remain low.
Besides, some analysts claim that the recent gold price dip is due to the US dollar's recent strengthening. These analysts point to the dollar's recent rise as the major threat to the gold price in the short and long-term. However, they say that fundamentals of supply and demand and historical late-cycle dynamics point to higher gold prices.
While it is true that the US Federal Reserve is likely to continue hiking interest rates until at least 2022, the real test of the gold price is likely to come in the form of a recession. Moreover, the US Federal Reserve's policy makers may be prepared to take drastic measures to keep inflation at an all-time low. If this happens, they could even hike interest rates twice.
The recent dip in gold prices could be an opportunity for investors to exit their long-term positions and buy a more liquid asset. In times of recession and market volatility, many traders are seeking cash to pay margin calls or bargain hunt. These conditions could push the gold price down to US$ 1,300 by 2020.
IAMGOLD Corporation is a Canadian gold mining company that produces about 1 million ounces of gold each year. The company is listed on the Toronto Stock Exchange and the New York Stock Exchange (NYSE:IAG). It has a strong balance sheet and culture of empowerment. This article will provide an overview of the company and its people.
The IAMGOLD Corporation is a mid-tier gold mining company with operations in North America, South America, and West Africa. It has three mines in operation and a large, long-life Cote Gold project in Canada which is expected to begin production in early 2024. The company also has a robust exploration and development portfolio. In addition to producing gold, IAMGOLD is actively exploring for new gold deposits in the region.
IAMGOLD has recently adopted new governance guidelines for board renewal, reflecting evolving best practices in corporate governance. The company's new guidelines include a limit of 10 years for board members. Additionally, no director should serve as Chair of a standing committee for more than ten years. Following the adoption of these new guidelines, John Caldwell, the Chair of the Audit and Finance Committee, stepped down from the Board effective January 4, 2021. The board appointed Ron Gagel as Chairman of the Audit and Finance Committee.
IAMGOLD Corporation is committed to high standards of environmental, social, and governance (ESG) practices. It has implemented the Toward Sustainable Mining framework and the Responsible Gold Mining Principles. It also continues to invest in a pipeline of greenfield and brownfield exploration projects. In addition, the Company has contributed over $1.5 million to COVID-19 efforts in its host country. It also completed Phase 1 of the Triangle d'eau public-private partnership in Burkina Faso, which will provide potable water to approximately 60,000 people.
IAMGOLD is committed to the safety and health of its employees and contractors. The company has implemented many measures to ensure that workers' health and safety is protected. For example, it has implemented strict sanitary measures, physical distancing, and contact tracing protocols. The company has also increased the number of transportation buses and on-site medical personnel.
IAMGOLD's current production guidance is for annual attributable gold production of 653,000 ounces, down from 680,000 ounces in the prior year. The Company anticipates a fourth-quarter production level of 169,000 ounces. In addition, the Company anticipates its total cash costs for 2020 to be at the lower end of its guidance range, while its all-in sustaining cost is projected to be between $1240 and $1270 per ounce sold.
IAMGOLD Corporation recently announced the renewal of its board of directors. The new board will consist of eight independent directors and one executive director, effective after the company names a permanent CEO.
IAMGOLD Corporation is a Canadian-based delineation diamond driller. Its shares are traded on the New York Stock Exchange (NYSE: IAG) and the Toronto Stock Exchange (TSx:IMG).
IAMGOLD has operations in Canada, West Africa, and South America. It has three operating mines and two exploration projects. It is also developing a large-scale mine in Canada called Cote Gold, which is expected to start production in early 2024. In addition, IAMGOLD has a robust exploration and development portfolio.
Empowering employees in the mining industry is a top priority at IAMGOLD Corporation. With over 5,000 employees, this Canadian company is committed to an inclusive culture of responsible mining and a zero harm philosophy. The company has received many awards for its commitment to corporate social responsibility, including a PDAC award for social and environmental sustainability and a Syncrude award for excellence in sustainable development.
A diverse Board has a wide range of skills and experience, ensuring an objective view of strategic matters. It is imperative that all Directors are independent of one another. Otherwise, they are less able to consider options objectively. Identifying the skills, experiences, and backgrounds of all directors should be the first step in board renewal. As IAMGOLD needs to improve operationally, it's essential to increase its diversity.
IAMGOLD Corporation has a prudent, debt-free balance sheet, and steady gold production. The company also has growth potential with its Cote Gold mine and the Boto project. However, the company is not a good long-term investment. It does offer some potential short-term trading opportunities, but investors should be aware of the company's problems. For example, in the third quarter of 2019, IAG reported a loss of $11.6 million, or $0.02 per share.
The MCX Gold December support levels are at Rs 45,600 and Rs 46,100. The resistance levels are at Rs55,680 and Rs56,010, respectively. In addition, silver prices have also increased by around Rs 200 per kg.
The price of gold on the MCX fell by Rs 387 to Rs 45,851 per 10 grams on Tuesday. The decline came on a stronger dollar and weaker rupee. The metal traded in a narrow range and the Federal Reserve may soon start winding down its bond-purchase programme, which is keeping global rates low. The precious metal declined by Rs 1,627 or 3.43 percent last month.
The domestic gold price is expected to reach a support zone of Rs 45,600 and Rs 46,100 in December. The price is also expected to cross the Rs 55,000 mark in the second half of 2022. The 20-day EMA remains at Rs 46,830 and could prove to be a key resistance in the near term. However, the bearish trend channel is still in place and a negative crossover could restrict the upside. Hence, MCX Gold December should be watched closely as immediate support lies at Rs 45,800 and Rs 46,100. The RSI is hovering below neutral, which implies a sideways to downward bias.
MCX Gold December futures recovered from the previous session's lows and traded higher on Friday. On the COMEX, spot gold was trading over half a percent higher near $1720 an ounce. Similarly, MCX Gold October futures opened higher near Rs 50542 per 10 grams. The weaker dollar and positive sentiments have helped gold prices recover. The dollar was trading 0.65% lower against six major currencies. Traders said that hawkish remarks from the US Fed would support gold prices. Analysts expect the price to move sideways or up.
Gold prices are now near a seven-week low. The dollar remains a headwind, but the Fed has reiterated that it is committed to fighting inflation, and a gradual increase in interest rates should be able to lower the price of gold. As for the Fed's policy, the central bank has reaffirmed its commitment to tackling rising food and energy costs. It has also promised to hike rates until inflation is at 2%.
Prices of gold in the Indian market vary daily. Ten grams of 24-carat gold in the national capital were sold at Rs 49,160, while one kilogram of silver was sold for Rs 69,100 yesterday. In addition to fluctuating market prices, the price of gold is influenced by state taxes and excise duties.
On Tuesday, spot gold prices declined by about Rs 200 to Rs 31,350 a ten-gram piece, with the dollar's strength weighing on prices. On the other hand, silver prices climbed by about Rs 75 to Rs 39,050 a kg on scattered buying from coin makers and industrial units. The gains came ahead of a key US payrolls data on Thursday, which is being closely watched by investors for its implications for interest rate policy. In addition, rising concerns about a stalemate between the US and China in the trade war also helped push prices higher.
The recent rise in silver prices is a good sign for investors looking for a long-term investment. The metal is a good alternative to real estate and bonds. Its low cost and rising availability make it easier for investors to buy. While silver may be expensive compared to gold, it is a safer bet for investors looking to make a profit in the long term.
Silver prices in India are influenced by the international prices, which can rise or fall. In addition, the price of silver depends on the rupee's movement against the dollar. A weak rupee will drive up silver prices, and vice versa. In recent years, the industrial sector in India has grown tremendously, which has led to an increase in silver prices.
In the past five trading sessions, silver has gained over Rs 800. Silver prices are now expected to hit Rs 41,000 a kg by July-August of this year. Last year, a major Canadian precious metals retailer said that silver will soon overtake gold as the dominant metal in the market.
In India, silver is mostly imported for jewelry and silverware. India is one of the top five countries in the world for its consumption of silver. In fact, about 60% of India's silver consumption is from the rural population, which views it as a safe, solid investment.
Silver prices follow the price of gold, so if the gold rate goes up, so will the silver rate. Alternatively, if the gold price goes down, silver prices will decline. In the case of the latter, the government may take steps to curb imports and limit the prices of gold and silver.
The strong dollar is a drag on gold prices, as it makes the yellow metal more expensive for holders of other currencies. In addition, the strong labour market in the US may encourage the Federal Reserve to raise interest rates even more aggressively, which is not good news for gold. Nevertheless, gold prices in India have recovered in recent days. On July 21, the yellow metal traded at its lowest price in more than a year. And even though the gold price rose on July 21, it has been trapped in a narrow range in overseas markets. It is currently trading at Rs 46,300 for 10 grams of 22-carat gold, and Rs 50510 for the same quantity of 24-carat gold.
As the US economy continues to slow, it will impact consumer demand for gold. However, central banks are still net buyers of gold, and they are likely to remain in that position in the near term. In addition, uncertainty about the economy's future will further impact consumer demand.
Gold prices are currently volatile and should only be bought on dips. Until the coronavirus vaccine is widely available, financial markets are unlikely to stabilize. But, if the economy does start recovering, gold prices are likely to rise.
Rising bond yields also played a role in gold's underperformance. The US dollar has hit two-decade highs and investors are looking for safe haven assets. This makes gold expensive for foreign buyers. Furthermore, rising bond yields increased the opportunity cost of holding bullion, which earns no interest.
While uncertainty over the economic outlook is a major factor, the Indian government has been aggressively controlling the current account deficit. In the past few years, the current account deficit has reached nearly 5% of GDP and is expected to drop to 2.5-3% in the current financial year. The government has also restricted gold imports, which has lowered the current account deficit.
Gold prices fell on Sunday to a four-month low. The metal was hovering around $1,740 per ounce in Asia. Gold prices are inversely related to the strength of the US dollar, with the stronger dollar making gold more expensive in other currencies and driving down demand.
As the world's second largest consumer of gold, India must have felt the pinch when the government decided to raise import duty on the precious metal. The sudden surge in the gold imports had put the country's current account deficit under pressure. With the increased import duty, the government hopes to cut down on the imports and preserve foreign reserves. However, the move is fraught with challenges.
The government is under pressure to reverse the duty. According to the COMEX, this higher duty on gold has pushed the price of gold down by nearly 5%. This would have a negative impact on manufacturing and goldsmiths. In addition, the increase in import duty could lead to further restrictions on the demand for gold in the country. But the government is trying to minimize the impact on the industry by creating alternative channels for investors.
The import duty hike is also expected to push gold prices higher in India. According to Ashish Pethe, chairman of the All India Gem and Jewellery Domestic Council, this hike would make gold more expensive for the consumer. However, the gold price futures on the Multi Commodity Exchange (MCX) and physical gold prices rose sharply after the announcement. Gold closed at Rs 51,950 per 10 gm on Monday.
The price of gold in India is dependent on international gold prices and the import duty. However, the domestic price of gold will vary depending on the duty percentage. Therefore, the price you pay will be higher than what you would pay internationally. If you are looking to buy gold jewellery for yourself, it's wise to take into account the import duty before making the purchase.
The government should consider reducing the import duty for all raw materials used in the jewellery industry. Most of the raw materials used in the jewellery industry are imported. Cutting the duty on these materials would help India's manufacturing capabilities. The import duty should also be cut on finished jewellery, cut & polished gemstones, and machinery used in the manufacturing of jewellery. This would also make import duty rates uniform across the country.