Tag: Gold

You can now buy sovereign gold on RBI Retail Direct Portal also, BFSI News, ET BFSI

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Mumbai, Dec 2, The sovereign gold bond can now also be subscribed on the newly launched RBI Retail Direct Portal. Subscription of the Sovereign Gold Bond Scheme 2021-22 – Series VIII is currently open.

“The Sovereign Gold Bond Scheme 2021-22 – Series VIII, which is open for subscription till December 3, 2021, is also available through RBI Retail Direct Portal at https://rbiretaildirect.org.in,” the central bank said on Thursday.

Till now, the bonds were sold through banks (except small finance banks and payment banks), Stock Holding Corporation of India Ltd (SHCIL), designated post offices, and recognised stock exchanges viz., National Stock Exchange of India Ltd and Bombay Stock Exchange Ltd.

Last month, Prime Minister Narendra Modi had launched the RBI Retail Direct Scheme, under which individuals can directly purchase treasury bills, dated securities, sovereign gold bonds (SGB) and state development loans (SDLs) from the primary as well as secondary market.

As per the scheme, retail investors (individuals) will have the facility to open an online Retail Direct Gilt Account (RDG Account) with the Reserve Bank of India (RBI). These accounts can be linked to their savings bank accounts.

The RDG Accounts of individuals can be used to participate in issuance of government securities and secondary market operations through the screen based NDS-OM.

NDS-OM, a screen based electronic anonymous order matching system for secondary market trading in government securities owned by the RBI, is currently open only to institutions like banks, primary dealers, insurance companies and mutual funds.



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Crypto prices stable in India as investors await details of new Bill

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Cryptocurrency prices continued to be stable on Indian exchanges 48-hours after major crash of 15-20 per cent across tokens; though with the exception of Sandbox token. It was the highest gainer yesterday but today it is trading below at 12.29 per cent of its peak price from yesterday.

At 10:57 am on WazirX, Bitcoin’s price had slightly gone up by 0.21 per cent, Shiba Inu’s price increased by 4.2 per cent, Tether was up by 2.45 per cent, Ethereum was up by 6.1 per cent and Basic Attention Token (BAT) jumped by 32.6 per cent.

Also read: Only a handful of cryptocurrencies that exist today likely to survive: Raghuram Rajan

Clearing some of the air around uncertainty and confusion on the draft Crypto bill, Finance Secretary TV Somanathan on Thursday in an interview with CNBC-TV18 said that people had just overreacted to the development of the crypto bill which will be tabled in the parliament’s winter session.

“However, one thing I can say very clearly is that crypto will not be legal tender by any means. Gold is not a legal tender, silver is not a legal tender and alcohol is also not a legal tender, beyond that I will not be in a position to say anything more,” he said.

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Gold steady as inflation woes offset firmer dollar, yields, BFSI News, ET BFSI

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Gold prices steadied on Tuesday, after rallying to a five-month peak in the previous session, as concerns over broadening inflationary risks kept bullion’s safe-haven appeal intact in the face of a stronger U.S. dollar and elevated bond yields.

FUNDAMENTALS

* Spot gold was flat at $1,862.81 per ounce, as of 0140 GMT. U.S. gold futures were also flat at $1,866.80.

* Richmond Federal Reserve President Thomas Barkin said on Monday the U.S. Fed will not hesitate to raise interest rates if it concludes high inflation threatens to persist, but that central bank should wait to gauge if inflation and labor shortages prove to be more long-lasting.

* Rate hikes tend to weigh on gold as higher interest rates raise the non-yielding metal’s opportunity cost.

* Bank of England Governor Andrew Bailey said he was very uneasy about the inflation outlook and that his vote to keep interest rates on hold earlier this month, which shocked financial markets, had been a very close call.

* Tightening monetary policy now to rein in inflation could choke off the euro zone’s recovery, European Central Bank President Christine Lagarde said on Monday, pushing back on calls and market bets for tighter policy.

* Pressuring bullion, the dollar index held close to a 16-month high and benchmark U.S. 10-year Treasury yields were near a three-week peak.

* A stronger dollar makes gold more expensive for buyers holding other currencies, while higher yields increase the metal’s opportunity cost.

* Speculators raised their net long gold futures and options positions to 146,319 in the week ended Nov. 9, the U.S. Commodity Futures Trading Commission (CFTC) said on Monday.

* Spot silver was steady at $25.04 per ounce. Platinum fell 0.1% to $1,085.54 and palladium dropped 0.6% to $2,142.19.

DATA/EVENTS (GMT) 0700 UK ILO Unemployment Rate Sept 1000 EU GDP Flash Estimate QQ, YY Q3 1330 US Retail Sales MM Oct 1415 US Industrial Production MM Oct



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Gold gleams as central banks hold off on interest rate hikes, BFSI News, ET BFSI

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Gold prices were poised for their best day in three weeks on Thursday as the U.S. Federal Reserve and the Bank of England indicated they were in no rush to raise interest rates.

Spot gold was up 1.6%, its most since Oct. 13, to $1,798.05 per ounce at 10:29 a.m. EDT (1429 GMT). U.S. gold futures for December delivery jumped 1.9% to $1,797.00.

The Fed indicated that they are probably not going to mess with interest rates, and that is bullish for metals, said Bob Haberkorn, senior market strategist at RJO Futures.

The Federal Reserve and its chair, Jerome Powell, on Wednesday signaled the central bank would stay patient – and wait for more job growth – before raising interest rates, while beginning to trim its massive bond-buying program this month.

Ultra-loose U.S. monetary policy has helped drive gold sharply higher since the financial crisis of the late 2000s, with low interest rates cutting the opportunity cost of holding non-yielding assets and inflation fears stoking demand for a hedge.

“The Bank of England leaving rates unchanged overnight shows central banks right now don’t have an appetite for higher rates,” Haberkorn said, adding that gold could by Friday go “north of $1,800 just based on sentiment and the technicals.”

The Bank of England kept interest rates on hold on Thursday, dashing expectations for a hike that would have made it the first of the world’s big central banks to raise rates after the pandemic.

Independent analyst Ross Norman said strong physical demand for gold was supporting the market, as India‘s Diwali festival generally boosts sales of the precious metal.

Elsewhere, spot silver rose 2.1% to $23.98 per ounce. Platinum gained 0.7% to $1,036.43 and palladium jumped 1.5% to $2,030.34.



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wgc: India’s gold demand could jump in Q4 on festivals, pent-up purchases

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MUMBAI – India‘s gold demand could strengthen significantly in the fourth quarter, the World Gold Council (WGC) said on Thursday, with a drop in global prices and the release of pent-up demand expected to lift jewellery sales during the peak festive season.

Higher demand from the world’s second-biggest gold consumer could help support spot prices after a near 5% correction so far this year, but a rise in imports of the metal would widen India’s trade deficit and weigh on the rupee.

“The fourth quarter is likely to be one of the best quarters in recent years. Pent-up demand, softening of gold prices and weddings will drive the demand,” Somasundaram PR, regional chief executive officer of WGC’s Indian operations, told Reuters.

Demand for the precious metal usually spikes towards the end of the year in India, as buying gold for weddings and major festivals such as Diwali and Dussehra is considered auspicious.

Demand for the precious metal usually spikes towards the end of the year in India, as buying gold for weddings and major festivals such as Diwali and Dussehra is considered auspicious.

Indians celebrated Dussehra earlier this month and anecdotal feedback from manufacturers indicated strong sales, he said.

The pick-up in retail demand gave confidence to manufacturers, and imports in the September quarter jumped 187% from a year ago to 255.6 tonnes, he said.

In a report published on Thursday, the WGC said gold demand jumped 47% in the third quarter from a year earlier to 139.1 tonnes as jewellery demand surged 58% to 96.2 tonnes.

Demand for coins and bars – known as investment demand – rose 27% in the same period to 42.9 tonnes as investors increased hedging amid a stock market rally, the WGC said.
Somasundaram did not provide a demand estimate for 2021, but said demand could be better than 2019’s 690.4 tonnes and well above 2020’s 446.6 tonnes.

“With restrictions being gradually lifted across the country, retail demand is bouncing back to pre-Covid levels. With the upcoming festive and wedding season, there is all the more enthusiasm towards gold demand,” he said.



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Gold in RBI’s forex reserves rise 11% to 744 tonnes

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The Reserve Bank of India’s holding of gold in foreign exchange reserves went up about 11 per cent year-on-year (y-o-y) to 743.84 metric tonnes as on September-end 2021 against 668.25 metric tonnes as on September-end 2020.

However, in value terms, the share of gold in the reserves declined to about 5.88 per cent against about 6.69 per cent in the year-ago period, as per the RBI’s half yearly report – Management of Foreign Exchange Reserves: April-September 2021.

Compared to September-end 2020 share of gold in the reserves (in value terms) at 5.87 per cent, the share rose marginally as on September-end 2021.

While 451.54 metric tonnes (366.91 metric tonnes as on September-end 2020) of gold is held overseas in safe custody with the Bank of England and the Bank for International Settlements (BIS), 292.30 metric tonnes (unchanged) of gold is held domestically.

Import cover

According to the report, at the end of June 2021, the foreign exchange reserves cover of imports decreased to 15.8 months from 17.4 months at March-end 2021. At the end of June 2020, the foreign exchange reserves cover of imports stood at 14.8 months.

The ratio of short-term debt (original maturity) to reserves, which was 17.5 per cent at end-March 2021, declined to 16.8 per cent at June-end 2021. This ratio stood at 20.8 per cent at June-end 2020.

The ratio of volatile capital flows (including cumulative foreign portfolio inflows and outstanding short-term debt) to reserves declined from 69 per cent at March-end 2021 to 65.5 per cent at June-end 2021. This ratio stood at 72.1 per cent at June-end 2020.

As on September-end 2021, of the total foreign currency assets (FCA) – comprising multi-currency assets that are held in multi-asset portfolios – of $573.60 billion ($502.16 billion as on September-end 2020), $383.74 billion ($370.59 billion) was invested in securities, $147.86 billion ($124.16 billion) was deposited with other central banks and the BIS and the balance $42 billion ($7.44 billion) comprised deposits with commercial banks overseas.

During the half-year period under review, reserves increased from $576.98 billion as on March-end 2021 to $635.36 billion as on September-end 2021.

On a balance of payments basis (that is excluding valuation effects), foreign exchange reserves increased by $31.9 billion during April-June 2021 as compared with $19.8 billion during April-June 2020.

Foreign exchange reserves in nominal terms (including valuation effects) increased by $34.1 billion during April-June 2021 as compared with $27.9 billion in the corresponding period of 2020-21.

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Gold inches lower on dollar uptick; focus on key central bank meetings, BFSI News, ET BFSI

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– Gold prices edged lower on Tuesday, weighed down by an uptick in the dollar as investors eye upcoming key central bank meetings this week.

FUNDAMENTALS

* Spot gold fell 0.1% to $1,805.96 per ounce by 0116 GMT. U.S. gold futures was flat at $1,806.60.

* On Monday, the metal rose nearly 1% to a high of $1,809.66, only about $4 shy of an over one-month peak scaled last week.

* The dollar rose 0.1% on Tuesday, recovering from a near one-month trough hit during the previous session. A stronger greenback makes gold more expensive for buyers holding other currencies. [USD/]

* Benchmark 10-year U.S. Treasury yields were also a tad higher at 1.6431%, raising non-interest bearing gold’s opportunity cost. [US/]

* Market participants eye meetings from the Bank of Japan and the European Central Bank (ECB) on Thursday. Neither of the central bank is likely to announce a change in policy, though the ECB might address how inflationary pressures could affect policy.

* The U.S. Federal Reserve and the Bank of England are also set to meet next week.

* Bank of England interest rate-setter Silvana Tenreyro said she needed more time to judge how the end of the government’s job-saving furlough scheme was affecting the labour market, adding to signs that she sees no urgency to raise rates.

* Gold is often considered an inflation hedge, though reduced stimulus and interest rate hikes push government bond yields up, translating into a higher opportunity cost for holding bullion which pays no interest.

* Spot silver fell 0.1% to $24.53 per ounce. Platinum edged 0.1% down to $1,056.35 and palladium gained 0.2% to $2,055.16.

DATA/EVENTS (GMT)

1400 US Consumer Confidence Oct

1400 US New Home Sales-Units Sept

(Reporting by Nakul Iyer in Bengaluru; Editing by Rashmi Aich)



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Gold loans sparkle again after second COVID-19 wave blip, BFSI News, ET BFSI

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Gold that lost shine after the Reserve Bank of India took away the loan-to-value (LTV) benefit for banks amid COVID restrictions in the second wave are sparkling again.

Gold loans were up 1% month on month in August 2021 as restrictions during the pandemic eased and economic activities grew.

Loan demand has picked up from the beginning of July as COVID-19 cases started declining. Gold loan non-banking finance companies (NBFCs) had reported higher customer walk-ins.

FILE PHOTO: Gold bars and coins are stacked in the safe deposit boxes room of the Pro Aurum gold house in Munich, Germany, August 14, 2019. REUTERS/Michael Dalder/File Photo

LTV impact

However, gold loans have grown a mere 3.6% year to date, which is in contrast with the 54% CAGR seen in gold loan growths over the past two years. Gold loan portfolios are up 66% year on year in August.

RBI had raised the LTV of 90% on gold loans, which allowed banks to lend up to 90% of the value of the collateral.

However, it withdrew the special allowance for banks from April 2021, impacting loan growth.

The average ticket size of loans that customers are opting for is Rs 55,000-60,000, which are rising for many lenders, showed growing signs of distress.

Gold loan NBFCs saw higher competition in the gold loan business last fiscal as banks grew their portfolio taking advantage of the special LIV allowance given to them by the RBI.

The expansion

With growth returning gold financiers are ow gearing up to tap the expected surge in gold loans.

Muthoot FinCorp has expanded its physical network by more than 100 new branches, mainly in the north, east and west regions of India, most of which were in rural and semi-urban areas. The NBFC had opened 70 branches in FY20.

Muthoot’s gold asset under management (AUM) grew at a compound annual growth rate of 12% between FY15 and FY20. In FY21, the portfolio grew 27%.

Pune-based Bajaj Finance has increased its gold loan branches from 480 to 700 in the last financial year and plans to add 100 plus branches this fiscal.

Its loan book grew 52% last year to Rs 2,300 crore while it saw an increase in ticket sizes from Rs 75,000 to Rs 85,000 last year.

Bengaluru-based Rupeek Fintech Private Ltd’s disbursals grew 2.5 times during the calendar year 2020. It has added its presence in 17 more cities, from 10 at the end of 2019.

Shriram City Union Finance is also looking to ramp up its gold financing business this financial year, changing its strategy of focusing on other loan portfolios.



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Gold prices dip on rising dollar, bond yields, BFSI News, ET BFSI

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Gold prices eased on Tuesday, hurt by a stronger dollar and rising U.S. Treasury yields, while investors awaited more cues from Federal Reserve officials on the central bank’s monetary policy shift.

FUNDAMENTALS

* Spot gold fell 0.1% to $1,748.01 per ounce by 0115 GMT, while U.S. gold futures were down 0.3% to $1,747.50.

* The dollar index was up 0.1%, making gold more expensive for holders of other currencies.

* Overnight, benchmark 10-year U.S. Treasury yields rose to their highest level in three months.

* U.S. Federal Reserve officials on Monday tied reduction in the Fed’s monthly bond purchases to continued job growth, with a September employment report now a potential trigger for the central bank’s bond “taper.”

* Fed Chair Jerome Powell is due to testify later in the day before Congress on the central bank’s policy response to the pandemic.

* In prepared remarks, Powell said the U.S. central bank would move against unchecked inflation if needed.

* While gold is often considered a hedge against higher inflation, a rate hike would increase the opportunity cost of holding gold, which pays no interest.

* China’s central bank vowed to protect consumers exposed to the housing market on Monday and injected more cash into the banking system as the Shenzhen government began investigating the wealth management unit of ailing developer Evergrande.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.3% to 990.32 on Monday.

* Poland’s central bank has more than 230 tonnes of gold and plans to expand its reserves, the head of Poland’s Central Bank said on Monday.

* Silver fell 0.8% to $22.47 per ounce.

* Platinum dropped 0.5% to $976.07, while palladium was down 0.6% at $1,952.44.

DATA/EVENTS (GMT) 0130 China Industrial Profit YTD, YY Aug 1400 US Consumer Confid. Final Sept



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Gold steadies below $1,800 as firm dollar, yields weigh, BFSI News, ET BFSI

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Gold prices steadied on Wednesday, after slipping 1.6% in the previous session when it breached the key psychological level of $1,800, as gains in the dollar and a rise in US Treasury yields hurt bullion’s appeal.

FUNDAMENTALS
Spot gold rose 0.1% to $1,796.03 per ounce by 0116 GMT, hovering slightly above the more than one-week low of $1,791.90 hit on Tuesday.

US gold futures were steady at $1,799.40.

The dollar hovered near a one-week peak against major peers.

The benchmark 10-year Treasury note rose as high as 1.385% on Tuesday for the first time since mid-July, increasing the opportunity cost of holding non-interest bearing bullion.

US President Joe Biden will present on Thursday a six-pronged strategy intended to fight the spread of the Delta coronavirus variant and increase vaccinations.

Japan’s economy grew faster than the initially estimated in the April-June quarter, helped by solid capital expenditure, although a resurgence in COVID-19 is undermining service-sector consumption and clouding the outlook.

Russia’s Nornickel, world’s largest producer of palladium and high-grade nickel, has extracted additional metals from waste products as part of new technology it tested to support its 2021 output from its Arctic mines that were hit by flooding, it said on Tuesday.

Venezuela’s gold reserves fell by three tonnes in the first half of 2021 to their lowest level in 50 years, central bank data showed on Tuesday, as President Nicolas Maduro’s cash-strapped government continues selling gold as a source of income.

Silver rose 0.1% to $24.32 per ounce, platinum edged 0.3% higher to $1,001.36 and palladium was up 0.2% to $2,376.37.



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