Gold rises above $1,800 per ounce

Gold price has gone past another important technical level, which is $1800 per ounce today.  

This is because the interest rate increases will be moderated in the US as per Federal Reserve Bank of the US, and which in turn is due to inflation easing in the US. Why is inflation easing, is another topic.

However this is a positive for gold prices, and gold prices are now just $200 below the most important $2,000 per ounce levels. Once gold prices cross $2,000 per ounce levels, and if importantly this time it sticks or stabilizes around at $2,000 per ounce level (Previously in August 2020, and also in March 2022, gold prices had briefly crossed $2,000 these levels). That will be a new normal for gold.

That is a level at which gold prices would reach their historical peak levels, will stabilize and shoot up even higher to new levels never seen before.

Gold and Silver Break Above Important Technical Level

On Nov 9th, Gold moved above $1,700 per ounce, which is an important technical level. To be sure, Gold had reached up to $2,050 per ounce in late March of this year. Gold had similarly moved above $2,000 per ounce in Aug 2020. 

During the initial part of this century, Gold increased from around $240 per ounce in 2001, all the way to $1,900 per ounce in 2011, a 646% increase.

Same for Silver, which has already crossed above 3 month high levels of $22 per ounce, and is all set to cross $26 per ounce which was its highest ever level reached, in March this year.

Gold price is at Rs.1994.8 per gram

Gold price has been at Rs.1994.8 per gram for past 4 days, just short of Rs.2000 per gram.

However the Indian currency Rupee has strengthened during last 4 days ( due to large Coal India IPO which is bringing in a lot of foreign money rising the demand for Rupee thus strengthening this currency). Due to this strengthening of Rupee, further price increases in Gold measured in Rupees is getting hit or suppressed. Hence only if Rupee weakens after few days or few weeks because of noisy demand from exporters (Infosys, leading IT exporter is already crying that the strengthening of Rupee is hitting its profits and saying that strong Rupee will kill exports). We will continue to hear more such noise from exporters.

Like I have written before, every time Rupee strengthens, the exporters like Technology companies and Textile companies will start crying and make noises. Immediately the Reserve Bank of India will intervene and weaken the Rupee again. This cycling will continue.

So one point is clear. Rupee or for that matter no Asian Currency will strengthen. All Asian governments have only task, weaken their respective currencies and encourage exports to save jobs.

So given this fact, there is only one way route for Gold to go up and up.

September gold import soars 30 pc to 34.8 tonne - The Economic Times

September gold import soars 30 pc to 34.8 tonne - The Economic Times

Gold ETF collections up 90 pc to 12.87T in Sept - The Economic Times

Gold ETF collections up 90 pc to 12.87T in Sept - The Economic Times

Gold price crosses Rs.1950 per gram

Gold price which was hovering just above Rs.1900 per gram for last 4 weeks, has made a big upward move on a single day Wednesday Oct 6th, to cross Rs.1950 per gram.

With the 9 day Navratri or Dasara or Dussehra festival starting this Friday Oct 8th, and with Diwali or Deepavali the festival of lights on Nov 5th early next month, Gold price has every reason to cross record Rs.2000 per gram very soon. Just 6 years back Gold price was Rs.500 per gram, now it is about to touch record Rs.2000 per gram very soon.

As written in my earlier article below, with all major Asian countries deciding to devalue their currencies to encourage exports, with paper money reducing in value - There is only one way for Gold price -> Go Up.

By the way after the Diwali festival ends on Nov 6th, immediately on next day Nov7th the Karthika Masam (auspicious Hindu month in Hindu calender particularly in South India) starts. The Karthika Masam will last until Dec 5th, and is an important Hindu marriage season.

With important festivals and marriage season back to back.....Gold Price looks set to go way up in coming weeks.

Why will Gold price keep increasing?

Gold prices have been increasing since last 5 years from Rs.450 per gram in 2004 to now at Rs.1910 per gram in 2010. As we see Gold prices have quadrupled or multiplied 4 times in 6 years. Recently wee see Media reports in Indian newspapers that high gold prices is discouraging buyers in India and Indian people are buying less Gold Jewelery than before because of high prices.

The value of Indian Rupee is pegged to US dollar between Rs.44 to Rs.50. The Government and RBI (Reserve Bank of India) will never allow the value of Indian Rupee to increase against US Dollar. Today India is highly dependent on exports particularly IT exports, therefore it makes absolute sense for Government to maintain the value of Indian Rupee competitive against the US dollar, so that India will continue to get more business in IT and other export sectors. This will most importantly create jobs for more people and also more job opportunities due to strong exports. Therefore it is in interest of maintaining a strong job market, the government has to maintain the Indian Rupee competitive, that is not allow the Rupee to increase in value!

This is the same strategy other Asian countries like Japan, China and United Arab Emirates etc follow to increase exports and create more job opportunities.

Therefore since no major Asian country wants to allow their currencies to increase in value, Gold price will only go up. Since Gold price will increase when value of paper currencies keep falling.

Gold price moves opposite to value of paper currency.