Global banking crisis spurred a spring-like rise in gold: silver also boomed

- Boolean Bits - Dinesh Parekh

- However, post-Holi demand hit by rising prices: Players now eyeing US interest rate hike this week

The news of three American banks going up against the black market has created a new kind of commotion in the world financial market. In the wake of the financial crisis in America's SVB Bank, it is hoped that the Central Bank will help them somehow.

Due to the financial crisis of Credit Suisse Bank of Switzerland, when depositors cannot withdraw more than 10 percent, Saudi National Bank cannot provide more cash financial assistance because according to the Swiss bank regulatory law, no bank can buy more than 10 percent of the total capital. This financial crisis caused the stock prices of European banks to fall. As a result, bullish air has blown in gold prices. A 20 percent reduction has been recorded in Credit Suisse Bank prices being quoted below two Swiss francs. Share prices of European banks have lost about 120 billion euros, reflecting a jump in gold prices of $50 to $60 an ounce against financial volatility. Gold was quoted as high as 1955 to 1960 dollars. Due to the closure of the banks, in the meeting of the Fed on March 21-22, Fed President Jerome Powell will not show more aggressiveness in his interest rate and will set the interest rate lower than 25 points rather than more than 50 points. Due to the weak situation of these banks, the fight between crypto currency and digital currency by the Fed and the falling bond prices have reduced the financial liquidity of the banks, and the announcement of the interest increase of the banks has shown a profit in the return of those bonds, but the weakness of the bond prices has created such a situation due to the lack of cash money of the banks.

Everyone started investing in gold, keeping in mind the safety of their money. As a result, gold has registered a jump of more than 100 dollars per ounce in the last 15 days.

A rise in gold prices in response to Fed rate hikes has cheered gold miners and it would not be surprising if they see gold prices break above $2,000 an ounce in a few days, resulting in more profits for gold miners and a bigger rally in gold mining stock prices. The surge is coming.

Meanwhile, China is increasing its gold reserves by selling dollar treasury bills. In the last 4 months, China has bought 102 tonnes of gold by selling treasury bills and reducing dollar reserves. It looks like the Fed may cut interest rates to manage the bank's crunch to keep inflation under control, and gold will continue to rally despite falling oil prices. The central banks of every country will continue to buy gold and the Fed will take steps to keep gold from becoming more volatile by increasing the demand for gold and sending a message to the world that the dollar is still the right token of exchange for all trades.

The bad condition of banks in the world market and the indication of Fed's interest rate cut has taken the bullish direction of silver and after silver broke the level of 2200 cents per ounce and quoted prices above 2230 cents, silver has once again blown bullish air.

A surge in silver prices has pushed up share prices of silver mines and mine owners are looking for opportunities to earn more profits by holding and hedging instead of selling silver at new prices.

As the demand for silver is increasing in the electronics sector and solar energy sector, it will have an impact on silver prices and there is no room for a slowdown in silver. Russia-Ukraine war-deteriorating condition of banks, low oil prices etc. have prompted investors to invest in silver. Overall silver looks set to play between 2100 and 2300 cents per ounce.

Domestic gold prices surged by Rs 1,000 per ten gram on news of strength in global gold prices and gold was quoted at Rs 5,900 per ten gram billed and unbilled at Rs 57,700 per ten gram. Showroom owners were hoping for moderate demand after Holashtaka, but this sudden increase in gold prices has shown consumers to buy jewelery after the gold prices stabilize and demand at higher prices is negligible.

Gold bullion traders were playing the game by predicting that the US Fed would raise interest rates by 50 points and predicting a recession in gold, but seeing the opposite effect on European banks due to the liquidation of American banks, gold suddenly took a U-turn and traders were caught sleeping and cut high price deals. Being forced to collect limited damages.

Smuggled gold is coming in abundance. It is calculated that the income of old gold will increase as the price rises. Overall, fluctuations in global gold prices and fluctuations in the exchange rate of the rupee against the dollar will determine local prices. Overall, gold will touch between Rs.56,500 and Rs.59,500 per ten grams.