Bulls hold firm in silver: Investors enter market at new highs

Boolean Bits - Dinesh Parekh

Importers limit gold imports: Total gold imports this year are expected to be 60 percent higher than last year

In addition to the indication that the Fed will meet the interest rate in the world market, the gold boom has stopped as the dollar strengthened and the price of gold dropped from the price of 2035 dollars per ounce to 1995 dollars per ounce quoted to 2008 dollars. But the following reasons indicate that investors are buying spot gold. (1) Everyone is buying gold to provide security against financial risk (2) Focusing on gold and buying gold to get more security of their property than investing elsewhere (3) Everyone is buying gold by hedging as gold provides security against inflation are attracted to invest, and add gold to their portfolio. There will be a boom in gold prices as people start investing in gold believing that gold is the best investment to secure against the bankruptcy of many banks and financial crisis, people are afraid that if the banks are closed, why will they buy the necessities of life, where will they buy groceries or oil. With gold and spot dollars being their priority in options, demand increased and prices soared as investors began to invest more in gold.

All eyes are on gold as the US job data is soft and private companies' job data is also showing a decline and factories are getting fewer orders. The World Gold Council states that banks have purchased 1,136 tonnes of gold in the year 2022, with the Central Bank of Turkistan, Uzbekistan, India and Qatar being major buyers. After the year 1990 and 2008, the central banks have changed their attitude and instead of selling the large amount of gold in the world market, they have stopped the sale of gold and bought gold and continued in the year 2023. In January and February of this year, Singapore, Turkey, China, India and Russia have bought 125 tons of gold.

The Gold Exchange Fund has increased its gold reserves by buying 32 tonnes of gold worth $1.9 billion. Meanwhile, European ETFs have added 10 tonnes of gold and SPDR funds have increased their holdings by buying gold worth $855 million. Cuts in oil production in the world market have created a bullish environment for prices, and strong prices have supported gold's rally. The chairman of the US Fed said that in May he will increase the interest rate by 1/4 percent and will be able to control the inflation. It should be noted that the demand for gold jewelery has increased as the fear of Covid in China has increased and the rising demand has helped to raise the price of gold.

Overall, the Russia-Ukraine war, strong oil prices, continued gold purchases by banks, high demand for Chinese jewellery, deteriorating financial condition of banks, etc. will have reverberations on gold demand and push up prices. Gold is likely to touch 2100 to 2200 dollars per ounce. Weekly fluctuations of 50-50 cents per ounce have been recorded in silver prices in the world market. Silver traded between a low of 2,502 and a high of 2,555 cents per ounce.

On the Comex market in New York, 180 traders added 5,556 contracts to positions in long-term silver contracts on April 14 to a total of 55,838 contracts. At that time, 83 traders have added 2821 contracts to a total of 31865 contracts in short-term trading. A total of 158 long-term silver traders increased their open positions by 10,480 contracts to 117,481.

Silver Institute predicts that silver demand will rise to 1.24 billion ounces in 2022 due to an 18 percent increase in global silver demand, which will lead to a shortage of silver in the world. . The World Silver survey found that silver supply fell by 51.1 million ounces against demand in 2021, while silver supply declined by 237.7 million ounces in 2022. It turned into a deficit in 2021-22 and even though a shortage situation is on the horizon, the quantity of silver hoarded by the people is being sold in the market, this deficit has been equal to the demand and supply position.