Volatility in Gold: Bullish Undertone in Silver Expected to Perpetuate

Boolean Bits - Dinesh Parekh

The central banks of each country have increased their gold reserves by buying 125 tonnes of gold.

Against the black market, gold traders are currently taking immediate advantage of the Fed's new monetary policy and the expected 25-point interest rate hike in May, which has created volatility in gold prices, and gold has started collapsing between the 1980 and 2015 dollar per ounce range.

In the month of January and February in the world market, the central banks of each country have increased their gold reserves by buying 125 tons of gold, which is the largest purchase since the year 2010.

Bank of America is calling gold's bullish endorsement, saying now is the time to invest in gold exchange-traded funds and buy gold.

At present, the threat of global financial crisis, drastic changes in environmental cycles, Ukraine-Russia war, US-China tension, North Korea's nuclear weapons show, agricultural news, oil price fluctuations, etc. have attracted people to invest in gold, which is a heavenly investment. The impact of the above and the impact of market volatility will cause large fluctuations in the price of the commodity metal. At that time, three members of the US Congress have presented the Gold Standard Bill to revive the gold standard and to curb the spending habits of America and to reduce the incidence of inflation and bank bankruptcies by putting a brake on the movement of printing more notes every day. After Silicon and Signature Bank, echoes of bankruptcy of Republic Bank are heard. Because a 1000 billion dollar drop in their deposits might bankrupt the American third bank.

According to the Google survey, 20 years ago, gold touched $2005 per ounce in April, and in August 2011, gold crossed the $1900 per ounce level, and then gold entered bearish territory. The boom has taken a new direction by kicking and gold has registered a jump of 10 percent.

In the last 13 months, two weeks ago, gold was trading around the level of $2000 per ounce. Investors started selling gold at high prices and holding gold at low prices to make profit. Lukman Otunuga, senior analyst at FXTM, said that uncertainty over the Fed's monetary future has softened the dollar and supported gold's rally with a 25 basis point interest rate hike in May, and we see gold fighting the financial crisis and possibly breaking out towards $3,000 an ounce. .

Thus the monetary policy of the Fed and the reduction in interest rates after December will determine the direction of gold prices and enter the bullish circle and hit the price of 2100 to 2200 dollars per ounce.

During the week, silver prices fluctuated by 30-35 cents per ounce in the world market. At this point, the world is about to take a new direction, with a strong voice shouting to everyone that the time has come for a new direction. After the 1980s, silver continued to languish under deflationary pressure. Compared to the 1980 silver price of $49 per ounce, today's silver price should be quoted at $184 per ounce, but today silver is quoting at $25 per ounce, which should be quoted at $8 per ounce as per the 1980 calculations, creating a murky situation. doing. The silver survey states that as demand rises against the supply of silver, prices tend to rise. But silver prices are expected to moderate on average before 2022.

On April 21, Comex silver positions stood at 132,933 contracts for a total of 132,933 contracts against an increase of 15,452 contracts by 163 traders on April 21 and 14,994 contracts against a gain of 14,976 contracts by 136 traders, indicating bullishness in long and short term silver prices. is

Metal Fox reports that China's silver jewelry purchases increased in 2023 and reached 235 million ounces in 2022, a 29 percent increase over the previous year.

Inflation in silver has increased by 20 percent per year. Overall, silver will show prices between 26 and 30 dollars per ounce.

There is a demand for marriages in the local gold market. When the futures price is quoted at Rs.60150 per ten grams, the price of gold present in the bill is Rs.1000 per ten grams as high as Rs.61150 per ten grams.