While a coordinated aggressive monetary easing from the central banks is most likely to offer some respite in the near-term, it is unlikely to improve the sentiments.
Gold extended its slump for the second day and shed another ₹ 350 to hit a six-month low of ₹ 29,000 per 10 grams in the bullion market.
Equity benchmark index Sensex buckled under selling pressure for the second straight session to close below the 65k mark on Friday, as investors offloaded IT, teck and metal stocks amid a bearish global trend. Besides, fresh foreign fund outflows also hit investor sentiments, traders said. In a volatile trade, the 30-share BSE Sensex declined 202.36 points or 0.31 per cent to settle at 64,948.66.
The inflows meant assets under management of gold ETFs climbed by over 4 per cent to Rs 13,503 crore at the end of August from Rs 12,941 crore at July-end.
Silver also reclaimed the Rs 34,000 per kg mark.
Gold, which was hovering around $1,321 an ounce in January 2019, has already breached $1,600 per ounce in the past few sessions to a seven-year high.
Skittish investors snapped up gold and other safe-haven assets amid fears of a global economic slowdown
Experts attributed the inflows to sudden rally in gold prices, mainly due to uneasy trade negotiations between the US and China and lower than expected global GDP growth.
Silver also rose sharply by Rs 640 to Rs 35,700 per kg.
Those who consider the rupee as a proxy for virility have started thumping their chests and dreaming of dethroning the dollar from its coveted position, observes Tamal Bandyopadhyay.
'Gold prices thrive on volatility and more so when the stock markets trend downward.'
Gold was among the least bruised by Monday's selloff, dropping half a percent versus a 6 percent slide in Brent crude and a 2 percent decline in copper.
The global high comes amidst the uncertainties of Brexit, a trade war and slowing growth, with traders increasing their silver bets.
The rupee on Thursday closed at its all-time low of 78.32 (provisional) against the US dollar as strong American currency and persistent foreign fund outflows weighed on investor sentiments. At the interbank foreign exchange market, the local currency opened at 78.26 and finally settled at its all-time low 78.32, unchanged from its previous close. On Wednesday, the rupee declined by 19 paise to settle at an all-time low level of 78.32 against the US dollar.
Gold prices hit record high in the third week of March as fears of bank collapses and high inflation led investors to the traditional safe haven. Gold prices are often inversely correlated to dollar strength because the international price is dollar-denominated. The Federal Reserve's (Fed's) stance indicates that the dollar may appreciate further since it is prepared to keep pushing up policy rates. But demand for gold is also up - the World Gold Council claims central banks are buying in addition to private demand.
Gold prices are struggling and are down 18 per cent from their March highs. But stock prices have fallen even more. As a result, the precious metal has begun to outperform equities - both in the domestic market and international markets. Gold prices are up 2.6 per cent in the domestic market in the current calendar year (CY22) so far, according to the World Gold Council (WGC), compared to a 1.7 per cent decline in the Sensex year-to-date (YTD).
Move 10 per cent of your portfolio to the yellow metal.
Prime Minister Narendra Modi on Saturday announced the adoption of the New Delhi Leaders Declaration, a significant victory for India's G20 presidency that came amid increasing tensions and divergent views over the Ukraine conflict.
Gold is often favoured as a hedge against economic and financial uncertainty
'Avoid going overweight on gold. But maintain a 10 per cent allocation via sovereign gold bonds,' Bajaj Capital MD Sanjiv Bajaj tells Sarbajeet K Sen.
Exposure to debt funds and gold is essential even if current returns from these asset classes are low, suggests Sanjay Kumar Singh.
The surge in volatility across the globe sparked by Russian invasion of Ukraine has led to an increase in prices of gold and silver - considered to be safe-haven investment bets. In the past month, silver funds have delivered returns of 7.34 per cent, while gold funds on an average have risen around 6 per cent. In comparison, the benchmark Nifty has declined 4 per cent. Fund managers say precious commodities act as a good hedge against inflation and phases of geopolitical uncertainty.
Investors' wealth eroded by over Rs 4.90 lakh crore on Friday amid a sharp fall in equities. The 30-share BSE Sensex tanked 1,020.80 points or 1.73 per cent to settle at 58,098.92. During the day, it tumbled 1,137.77 points or 1.92 per cent to 57,981.95. The market capitalisation of the BSE-listed firms plummeted by Rs 4,90,162.55 crore to Rs 2,76,64,566.79 crore on Friday.
'You may see some movement indicating a simpler tax regime with less exemptions but with fewer tax rates making life simpler for taxpayers.'
The trading range for the Spot USD/INR pair is expected to be within 66.20 to 67.00.
'FDs should hold your emergency funds, equivalent to around 6-12 times your monthly expenses.'
India has received the fourth set of Swiss bank account details of its nationals and organisations as part of an annual automatic information exchange under which Switzerland has shared particulars of nearly 34 lakh financial accounts with 101 countries.
Sending money to families in India will get more expensive
The value of foreign portfolio investors' (FPI) holdings in domestic equities reached $654 billion in three months ended December 2021, a drop of nearly 2 per cent from the preceding quarter, according to a Morningstar report. This was largely on the back of a massive sell-off by foreign investors and a correction in the Indian equity markets, especially in the large and mid-cap sectors. "At the end of the quarter ended December 2021, the value of FPI investments in Indian equities fell to $654 billion, which was lower than $667 billion recorded in the previous quarter, a fall of around 2 per cent," the report noted.
Despite its recent underperformance, gold must be a part of your portfolio.
'Investors should reduce cash gradually and look for value investing.'
The rupee weakened by 27 paise to trade at six-week low of 60.45 against the US dollar in early trade today at the Interbank Foreign Exchange market on high demand for the American currency from importers.
Mandatory hallmarking of gold would be a positive in making the gold market more organised. Mandatory hallmarking would come into effect from January 15, 2020, with a one-year transition period for trade to sell existing inventories. Experts also expect more policy measures next year to bring in more transparency in terms of gold as an asset class.
He also said that terrorists are constantly finding new ways to carry out violence, radicalise youth and raise financial resources and the darknet is being used by terrorists to spread radical content and conceal their identities.
Even as rising crude oil prices, trade war fears and a sliding rupee cast a shadow on market sentiment, Nischal Maheshwari, chief executive officer for institutional equities and advisory at Centrum Broking, tells Puneet Wadhwa that in the next one year, the outcome of the 2019 general election is a bigger challenge for the market.
Bank shares were the top losers along with index heavyweight RIL
Brent crude prices fell to $57 a barrel on Monday from $62 a barrel.
The rupee had gained by 50 paise or 0.75 per cent in two weeks.
Marking a key milestone in the Indian government's fight against black money allegedly stashed abroad, India will get this month the complete information on flats, apartments and condominiums owned by Indians in Switzerland as also on earnings made from such properties to help it look into tax liabilities associated with those assets.
Organisations and individuals that try to create sympathy for terrorists must also be isolated, he said addressing the third 'No Money for Terror Ministerial Conference on Counter-Terrorism Financing' hosted by the Ministry of Home Affairs.
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