Gold up: Silver Rs. Heading to 70,000: Global banks' buying spree in precious metals

- Boolean Bits : Dinesh Parekh

- World market players eye on short interest rate hike in America: Global gold prices rose to $1800

The gold traders in the international market were waiting for the Fed's interest rate hike announcement and as per the Fed Chairman's expectation, the interest rate will be increased by 50 points in December and the announcement that the rate of interest rate hike will be controlled in the next year as well. The gold market said that the inflation rate and the interest rate Fluctuations will determine gold market prices. Gold prices were quoted at $1,800 per ounce on Friday after the week saw fluctuations of $20-25 per ounce as interest rates slowed.

The news that there will be a recession in the world caused a huge crash in crude oil prices and oil started quoting low prices of 80 dollars per barrel. The central banks of all countries are buying gold due to the fear of recession and the Chinese people are buying gold for the safety of their property due to the fear of China's Kovid-19. . As a result, in the last 3 years, China has purchased 103 million ounces of gold and is investing in gold by reducing its dollar reserves. Central banks have purchased a total of 400 tonnes of gold in the third quarter of 2022. In the third quarter, central banks have purchased 393 tonnes of gold. In the last twelve years, Central Banks have bought 5,692 tonnes of gold to increase their gold reserves in an effort to keep their currency stable.

In this year 2022, the Central Bank has purchased 31 tons in the month of October, more than the purchase in October of 1974. In the global gold purchase, UAE has purchased 9 tons of gold while Kazakhstan bought 3 tons of gold in October. Qatar added 1 ton of gold to its reserves. The National Bank of Cambodia has bought two tons of gold in the month of July to September, increasing its gold stock to 52 tons. India has also increased its reserves to 781 tons by buying gold and India has added 200 tons of gold after 2017, taking the 9th place in the world gold reserves.

Then comes the mysterious thing that China seems to have bought 300 tons of gold from Russia this year.

At that time, the record breaking price of gold in Pakistan has been maintained by the purchase of gold by registered people and has quoted the price of gold at 164000 Pakistani rupees per tola. The reason for this is that the economic stricture of the US against Pakistan and local inflation has pushed up the gold. The global gold exchange traded fund has recorded a loss of 34 tons of gold during 7 consecutive months and gold worth 1.8 billion dollars has decreased.

Overall, gold will hit between $1,770 and $1,830 an ounce, keeping the pace of interest rates at bay, keeping inflation in check and falling oil prices. There will be bullish and bearish shocks in gold but it will not be surprising if gold shows higher prices at a slower pace.

Silver prices in the global market have signaled further gains, lagging behind the pace of gold, after gaining 122 cents during the week to quote 2329 cents an ounce on Friday. Silver has seen a faster bullish decline than gold and silver may once again touch $30 an ounce. Liquidity has increased in silver prices. At that time, the price of March futures was 2340 cents per ounce. It should be noted that the production of silver mines in Peru shows a decrease of 2.3 percent in the month of October. In September 27075 kg and October 263906 kg have been produced. Peru accounts for 17 percent of the world's total silver production.

India's silver imports are expected to pick up this year while silver purchases from China are expected to pick up this year. As global recycling revenues are falling and silver supply is shrinking and more silver is being withdrawn from vaults, there will be a silver shortage in the long run and silver will rise.

Domestic gold prices have risen less compared to the global increase with spot gold at Rs 53,200 and futures at Rs 54,185 per 10 grams. A gap of Rs.1000 per 10 grams between spot gold and futures prices indicates that gold buying has remained low at higher prices. A few months ago, spot gold was quoted at Rs.900-1300 per 10 grams higher than the futures price.