Festivities spur fast rally: Global gold springs up on war fears

- Boolean Bits - Dinesh Parekh

- Prices in the Ahmedabad market were quoted above Rs.62 thousand: The fear shown in the market of hitting the seasonal demand due to rising prices

While the Ukraine-Russia war was ongoing in the black market, the attack on Israel by Hamas in the Middle East has created the possibility of a global war, and gold has halted its decline and taken a bullish turn. The Israeli attack by Hamas in the 2021-2023 war cycle has created an explosive atmosphere in the world and this war has supported the gold boom and will lead to new record breaking prices. At this stage, if we focus on the fight, the Fed's interest rate hike policy, the rise in oil prices, and the dollar's strength-weakness and other conditions, in such a situation, new dilemmas will arise for investors. Gold rallied after the bombing of a hospital in Gaza, quoting $1,985 an ounce on Friday, as Iran fueled the fighting by supplying oil reserves to support Hamas attacks.

After the last 11 weeks, high prices have been seen in gold. In it, the environment has become gloomy due to the killing of 7 miners of gold mines in Papua Guinea.

Rising oil prices have supported gold's rally. Ignoring the strength of the dollar, gold has taken a bullish direction and there is a possibility that gold may touch the price of 2100 dollars per ounce. The gold premium in China's Shanghai Exchange has been quoted as a premium of $112 per ounce over London prices.

Chinese investors are hedging against a weakening yuan by buying gold at a huge premium in gold.

Central banks of every country are increasing their country's reserves by buying gold. The Fed is trying to manage the economy by raising interest rates one more year to control inflation. Overall, it will not be surprising if the price of gold rises in a circle and hits between the prices of 1900 and 2100 dollars per ounce, indicating that the gold fight will be long.

Silver also strengthened behind gold in the global market and on Friday silver prices started quoting at 2370 cents per ounce.

The Silver Institute states that the auto industry will use 8.8 million ounces of silver in the coming days and will account for 50 percent of the total global silver supply in 2040. The Silver Survey states that demand for silver increased by 38 percent in 2020 and 18 percent last year to 12.4 million ounces. A shortfall of 511 lakh ounces was recorded in 2021 and 2022 against silver production.

In the year 2022, the total demand for silver in the Photovoltaic sector is estimated to be 140.3 million ounces and in the year 2023, the demand will increase by 18 percent, i.e., the demand will be 161.1 million ounces. The scrap of old jewelery is now in short supply in the immediate market as people are not coming to sell silver in anticipation of rising prices due to the war in the Middle East.

The price of gold rises in the world market. In it, the rupee weakened against the dollar to Rs.83.28 new money. The level of imported gold rises. However, the demand for gold will be good in the domestic market with more bills being bought and the importers meet the market demand by ordering gold by determining the global gold price and dollar-rupee exchange rate. In it, smugglers try various techniques to smuggle large quantities of gold to meet the market demand by bringing gold through passengers. Coin makers are minting gold coins in the hope that sales of gold coins will be good during Dussehra and Diwali. Old gold earnings are improving as prices rise. Even at higher overall prices, demand for gold will remain good and prices will remain high.

Due to the tax probe in the Mumbai silver market, silver bullion traders have stopped quoting bill prices and on Thursday they were quoting bill prices only. .

Importers import silver by fixing the global price of silver at each price and by fixing the dollar-rupee exchange rate. Exporters are exporting silver gift articles and utensils. Overall the sale of silver coins will be good so there will be a rush of coins. Overall, silver will hit between Rs.72000 and Rs.74000 per kg.