GJ Town India

  Pushing US to exacerbate inflation & stymie economic growth    According to the Augmont Bullion! Gold holds steady ahead of Trump's reciprocal tariff threats! Gold prices remained stable as market investors squared their positions ahead of US President Donald Trump's sweeping reciprocal tariff plans, which they fear will exacerbate inflation and stymie economic growth. The focus is now on potential reciprocal tariffs that the US administration may impose on April 2, prompting some market concern.    In March, U.S. consumer confidence fell to its lowest level in more than four years, with households dreading a potential recession and increased inflation caused by tariffs. On the geopolitical front, the United States on Tuesday negotiated deals with Ukraine and Russia to halt their strikes at sea and against energy targets, with Washington agreeing to attempt to lift certain sanctions against Moscow. Considering the Technical Triggers, Gold has stron...

Dollar weakness and ETF flows fuel gold   Recently, World Gold Council released their Gold Market Commentary for the month of February 2025. The Commentary reviewed the February; Gold hit new highs during the month, supported by a weaker US dollar, extending its y-t-d gains to 9%.   Gold continued its uptrend in February, hitting multiple new highs before pulling back to end the month at US$2,835/oz – up 0.8% m/m.1 This performance was echoed across major currencies, all of which also registered new record highs. General interest in gold was bolstered by continued flows of gold into COMEX inventories, driven by continued tariff uncertainty.   According to our Gold Return Attribution Model (GRAM), US dollar weakness during the month was one of the primary drivers of gold’s performance, alongside an increase in geopolitical risk and a drop in interest rates. And while gold’s strong price appreciation in January created a small drag, it was counterbalanced by positive suppo...

  Structural uptrends may offer attractive entry points in 2025   Over the past two years, a breakdown in the relationship between gold and real interest rates has been on display. “We have in the past attributed the phenomenon largely to emerging market central bank buying and geopolitical risk premia. But perhaps bond uncertainty has also played a role, said World Gold Council (WGC) in their Gold Market Commentary for the month of December 2024.   Data suggests that when interest rate uncertainty – as measures by the MOVE index - is high, yield trajectory appears to exert less of a drag on gold returns than when it is low. It also looks like this is a statistically significant difference, if we regress gold returns on a real yield component with an interaction dummy for when the MOVE index is above 100 (it has recently risen to 99).  The normal sensitivity is more than halved when bond uncertainty is high, even accounting for moves in the US dollar index. ...

  Demand largely driven by investment & wedding related purchases!   Sachin Jain, Regional CEO, India, World Gold Council said, “Buying gold is considered auspicious during Dhanteras, Diwali. From gold jewellery to gold bars, gold coins consumers plan at least a token purchase as a matter of tradition as gold buying is generally believed to herald good fortune, wealth and prosperity and that is visible in the sharp rise in gold buying historically witnessed on this day.   Despite gold prices touching record highs of Rs 79,000/10 grams, anecdotal feedback from Industry indicates a resurgence in gold buying due to various ongoing festivals, with demand largely driven by investment sentiment and wedding related purchases.  The retailers have also invested on new designs and innovative usage of technology to make daily wear, lighter jewellery considering heightened gold prices, to invite consumers to come into the stores. There is also an expectation of incre...

Import duty reduction in India, a catalyst for demand!   Recently Kavita Chacko, Research Head, India- World Gold Council wrote about India’s gold market update: Import duty reduction, a catalyst for demand! The significant cut in import duty on gold and the resultant decline in the landed cost of gold have been a shot in the arm for gold demand in the country. Anecdotal reports suggest that there has been strong buying interest from jewellery retailers as well as consumers since the duty reduction.  At the recently concluded India International Jewellery Show, manufacturers noted that there has been a substantial increase in order bookings from retailers, who are preparing for the festive and wedding season running through December.    In some cases, these orders have reached levels not seen in several years. Additionally, the trend of bar and coin buying remains strong, supported by consumers as well as jewellers who are capitalising on supportive gold prices ...

Embrace storytelling, symbolism & creative narratives to sell Make in India, Design in India-Create in India designer jewellery to the world   Part 2: In the session on Global & India Gold Demand Trends, Kavita Chacko, the Research Head for India at the World Gold Council (WGC), said, "2024 is likely to be a record year for mine production of gold; Jewellery demand in 2024 will be firm but vulnerable to gold prices.   Bar and coin investment likely to remain healthy, with high prices and geopolitics attracting attention. Central banks are likely to keep buying gold at an impressive rate. Global annual jewellery demand held steady in 2023 at around 2200 tonnes even in a very high price environment.    In 2023 Gold has benefitted from a) Highlighted geo-political risk; b) Consumer demand; and c) Central bank buying. Annual Gold demand in 2023 rose 4%, reaching an all-time high of 4,930 tonnes. Contribution of 2 sectors a) jewellery demand and b) central ...

Gold jewellery 7% & Gold demand up 10% in India   Somasundaram PR, Regional CEO, India, World Gold Council (WGC) said, “India’s gold demand of 210t in Q3 2023 was higher by 10% over Q3 2022 of 191.7t. Purchase of gold jewellery in India was up 7% y-o-y aided by softer gold prices and festive demand, more pronounced in South India.   Investment gold demand, that is bars and coins, jumped 20% to 54.5t from 45.4t in Q3 of the previous year. Price correction was a major factor that triggered the latent demand which we believe continues to be strong underpinned by strong positive economic sentiment mixed with uncertainties arising from a variety of factors such as fear of inflation, below-normal monsoon and global developments. Gold recycling in India recorded 19.3t, a 20% growth over last year, which is more due to low base of last year and perhaps some profit taking. We believe recycling will continue to grow as initiatives of organised players to increase recycling of jewell...

Gold price support over Rs 61K per 10 grammes   Right now our auspicious festive Gudi Padva, is just at latch and gold price trend is on rock! At the occasion Somasundaram PR, Regional CEO, India at World Gold Council (WGC) said, “This year Gudi Padwa is being celebrated even as gold prices are headed for historic highs in the domestic market.    As economic growth influences demand significantly and this gets reflected in gold purchases on such auspicious days, demand is poised for good growth in 2023. Price pressures could keep rural demand subdued. Urban buying and digital gold accumulations which permit flexible low-ticket sizes could be emerging stories during this festive season.”  In general WGC is not focussing much on gold price trend and gold price outlook. In the perspective Colin Shah, MD, Kama Jewelry expressed as an expert on gold prices hitting Rs 60,000/10gm level.  He said, “Gold prices have risen almost 7-8% in the past month.    ...

The myth regarding gold & what does the data tell us?   Recently ABC Bullion highlighted the myth & asked, does gold need the dollar to fall? One of the interesting myths regarding gold as an investment is one that suggests it only does well in periods the US dollar (USD) is falling. Indeed, some analysts go so far as to say that it’s the anti-dollar.   It’s of course worth noting briefly that up until 1971, US dollars were formally backed by gold, at a formal price of close to $35 per troy ounce (oz), meaning you could exchange USD $35 for an ounce of gold through the banking system.   This backing was brought to an end during the Nixon administration, and it has now been just over 50 years since the US abandoned the gold standard. Back to the myth regarding gold and its relationship with the USD, in simple terms, some believe that anytime the USD is going up in value, the gold price will be going down, and vice versa. A detailed examination of market hist...