Page 26 - Bullion World Volume 02 Issue 11 November 2022_Neat

Bullion World | Volume 2 | Issue 11 | November 2022
Gold and Silver Glittering always

Mr Anuj Gupta, Vice President, Research & Product, IIFL Securities

Gold is always a choice of every The current gold market is
trader, investor and central banks. an illustration of diversity and
However, in last two years it did not expansion. The amount of gold
gave any significant return but in a purchased annually has almost
last 5 to 10 years it gave a handsome tripled since the early 1970s, and
return and beat the other portfolio gold markets have exploded all over
return. Now for the coming time the world. While the country's COVID
gold prices may be based on the limitations did slow consumption
difference aspects which are related from January to September,
with dollar, geopolitical tension, according to the China Gold
crude oil and political uncertainty. Association, demand has recently
begun to increase.
Since the beginning of the year, gold
prices have dropped by 3.6% and In Singapore and Hong Kong, bullion
are now almost 15% below the all- traded at a premium of $1.50 to
time high of USD 2.070 per ounce hit $2.50 per ounce over the spot rates their potential repercussions, and
on March 8. This has primarily been for the world. Japanese traders potential mitigation or management
caused by aggressive tightening of offered bullion for sale at par or at a strategies.
monetary policy by central banks, premium of $0.50.
an increase in US real yields, and We believe that the forecast for the
a stronger currency. In fact, 10- The World Gold Council and its price of gold is more promising for
year real rates—defined as nominal members are aware of the grave 2023. We anticipate both a decline
yields less expected inflation— have concerns that climate change in the value of the US dollar as
increased by more than 150 basis poses to the world economy well as a rate cut by the Fed in the
points in 2018. In addition, the US and socioeconomic progress. second half of 2023. Additionally,
dollar is currently 13% higher than Policy makers, business owners, we anticipate lower US real yields.
it was at the beginning of the year. investors, asset owners, and the Therefore, it is expected that gold
Investors partially liquidated their general public are now keen for a prices will increase again in 2019.

positions in ETFs as a result. better knowledge of these risks, Despite this, we do not anticipate
that gold prices will reach a new
high. This is due to the fact that
other central banks are unlikely to
begin lowering rates because they
will keep fighting inflation even if their
economies continue to weaken.

Despite the fact that gold is regarded
as a hedge against inflation and
economic uncertainty,rising interest
rates make the asset—which doesn't
pay interest—less appealing.

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