Inflation growth in US under pressure on gold prices: indications of increased smuggling

Boolean Bits - Dinesh Parekh

China re-enters world market after six months to buy gold: Turkey puts brakes on new gold purchases after earthquake

In the global market, Fed Chairman Jerome Powell indicated that the interest rate will continue to increase in the year 2023, the gold boom has a break, and gold has fallen around 1830 dollars per ounce.

With Russia shooting down a convoy of aircraft on Ukraine's border, the fighting has escalated and signs of a protracted war will weigh on gold prices.

China has postponed the purchase of gold for the last six months but has now bought 25 tonnes of gold to increase its reserves to 2025 tonnes. Turkey has banned gold imports for a few days after the earthquake and is struggling to keep the currency stable.

After the CPI data, Richmond Fed President Thomas Marken and Dallas Fed President Lori Logan say the central bank will have to focus on bringing inflation down to 2 percent. The Fed's interest rate hike from 5 to 5.25 percent will have to fight to bring down inflation. As interest rates rise, bullion prices are sensitively correlated with interest rates, and the interest rate pressure will be zero on the metal with the interest rate-increasing property.

In the year 2023, the economic and financial conditions of 2010 and 2019 will echo and gold prices will show bullish trend with price fluctuations. There is a possibility that the price of gold and silver will fall further in the summer season. Despite the financial liquidity, gold will rise in the next six months and show a price of $2000 per ounce. Germany checks how much gold the Federal Bank has in reserve. Eastern and Gulf countries are breaking new ground by trading oil with commodities and marginalizing the dollar by valuing gold. Twelve months into Russia's war with Ukraine, there is no end in sight, and the demand for gold has increased as America and Europe impose sanctions on Russia and Russia takes the gold payment route against them. In it BRICS, China, Russia, India, Brazil etc. countries have bought oil by paying commodity in exchange for oil.

Kazakhstan has bought 39 tons of gold in January 2023 and officially its gold reserves have reached 355.6 tons, while the demand of global central banks was 1136 tons in 2022.

How the Fed's interest rate hike affects gold remains to be seen in the long run. But as every country increases its gold reserve against its currency, the demand for gold will increase, and China will buy more gold through Hong Kong during the Chinese New Year period, which will support the rise in gold prices.

Overall, oil prices have come down, but gold demand will not be surprising if gold hits $2,000 per ounce. In global silver prices, the Fed's continued interest rate hikes led to a bearish trend in silver, with silver falling within 2,200 cents per ounce to trade at 2,145 cents per ounce. Last Thursday's Comex market in New York saw a drop in silver prices by $2.30 per ounce. Silver bulls were getting more excited and were trying to create an atmosphere that silver would rise and even when silver showed a high of $26 an ounce last year, it was saying that the bull would continue, but silver fell to $18 an ounce and quoted prices again at 2145 cents an ounce. Price quotes. Silver was rumored to break $30 an ounce in the summer of 2020 and early 2021, but that assumption turned out to be wrong. Looking at every aspect, it seems that silver will not rise immediately and silver will hit around $20 per ounce.

As the production of silver mines increases, the income of old silver is expected to increase in the global market. Silver withdrawals from New York and London vaults have increased, but there will be no big rally in silver and silver will hit between 20-26 dollars per ounce, indicating that the shortage of silver will not let Morgan fall. Also, it has to be noted that the demand for silver will increase in the solar energy and electronics sector.

Global soft news in domestic gold prices and domestic cool demand has put a brake on the gold rally. There has been a gap of Rs.1000 per ten gram in the price of gold in two weeks, but the gap between future and spot gold prices has increased from Rs.400 to Rs.1000. Futures are quoted at Rs.56200 and spot gold at Rs.57200 per ten grams. There has been a slight decline in the income from old gold, but a lot of gold is coming into the country through smuggling. In it, gold smuggled from Meghalaya, Bhutan and Bangladesh enters the country. Air smugglers are trying new techniques to bring gold in paste form, powder form and in drag with the help of airline staff. At present, 59 kg gold is being caught with the help of aircrew, and the customs are more vigilant in catching the smuggled gold. Imported gold comes in very limited quantities as the cost of imported gold is high.