Gold prices at new all-time high, entering years-long bull run: Analysts

Investment in precious metal safe based on outlook for India in the next four months

Gold hit an all-time high on Monday as ties between China and the United States rattled investors, boosting the allure of safe haven assets. The metal was trading at $1,933 per ounce in the international market and in India it was above Rs 50,000 per 10 gram. A gold market cycle usually last 8-10 years, indicating that a bull run is underway. The last rally started in 2001 and ended in 2011, when prices went up sent times from the 2001 level. After peaking, prices fell 46 per cent and consolidated for years.

“Gold has entered a bullish phase that can last several years. We also think that there is better than 50% probability of gold approaching $3,000 in this cycle,” said US-based analyst Nigam Arora, author of the popular The Arora Report, a newsletter service on investments.

Christopher Wood, global head of equity strategy at Jefferies, last week said in a report that gold could rise to $4,000. Imports, in US dollars, decide gold price in India. The dollar may weaken due to Federal Reserve policies and the U.S government’s government, giving gold tailwind. Real interest rates are negative, helping gold.

‘Longer it goes on, the stronger we get’: Trump takes on China on trade war

Trump claimed that millions of jobs have been lost and thousands of companies are shutting down in China.

US President Donald Trump has said that China is doing very poorly as a result of the trade war and the “longer it goes on, the stronger we get”. Asserting that the United States is “having a very good discussion” on a trade deal with China, Trump told reporters at the Morristown airport in New Jersey that he will speak with Chinese President Xi Jinping “very soon”.On the protests in Hong Kong which have been going on since early June, the US president said that Xi can “humanely” solve the problem so that “everybody is happy”.

“I think the longer the trade war goes on, the weaker China gets and the stronger we get. We’re taking in massive amounts of money. Billions and billions of dollars. And I think the longer it goes, the stronger we get. I have a feeling it’s going to go fairly short,” he said on Thursday.

As a result of the US China trade war, China is doing very poorly, Trump said. “The tariffs have really bitten into China. They haven’t bitten into us at all except for the reporters that want to make it look that way, but they don’t understand what’s happening,” he said.

“We’ve taken close to USD 60 billion in tariff money. The consumer has not paid for them. Now, at some point, they may have to pay something. But they understand that,” Trump asserted.He claimed that millions of jobs have been lost and thousands of companies are shutting down in China.

Rupee falls 38 paise to 74.06 over strengthening US dollar, RBI-govt rift

A stable crude oil prices, however, restricted the rupee fall to some extent, forex traders said

Share Market News: The rupee dropped by 40 paise to 74.08 against the US dollar in early trade Wednesday, amid increased demand of the American currencies from importers and sustained foreign fund outflows. Forex traders said, the US dollar’s strength against some currencies overseas and concerns around the rift between the government and the RBI also weighed on the local unit.

At the interbank foreign exchange, after opening lower at 73.91, rupee weakened further to quote at 74.08 against the dollar registering a fall of 40 paise over its pervious close. The rupee Tuesday depreciated by 23 paise to close at 73.68 against the US dollar.

A stable crude oil prices, however, restricted the rupee fall to some extent, forex traders said. Globally, Brent crude, the international benchmark, was trading 0.62 per cent up at $76.38 per barrel.   

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Meanwhile, the Reserve Bank of India has said that it will inject Rs 400 billion into the system in November by buying government bonds through open market operations (OMO) for maintaining liquidity in the market. On a net basis, foreign investors pulled out Rs 15.92 billion from equity markets Tuesday, as per provisional data.

Meanwhile, the benchmark BSE Sensex opened on a higher note up 158.99 points but soon pared the gains and was trading at 33,876.69, down 14.44 points or 0.04 per cent at 0948 hrs.

Rupee set to shed gains, weaken to 65 if dollar revives: Reuters poll

Chinese yuan is forecast to weaken to 6.90 per dollar a year

In 12 month's time the Chinese yuan will have erased most of its gains made this year, provided the US Federal Reserve sticks to its tightening path, boosting the greenback, a Reuters poll showed.

Having strengthened more than 3 per cent since the start of 2017, the yuan is forecast to weaken to 6.90 per US dollar in a year, according to the poll of over 60 foreign exchange analysts taken July 27-Aug 2.

It was trading around 6.72 on Wednesday.

While the US dollar should benefit when the Fed starts shrinking its balance sheet, which it has said it expected to do "relatively soon", it could falter again if the central bank fails to follow through with a rate hike later this year. 

At the start of the year, traders had expected faster rate hikes from the Fed and some form of stimulus from the new Trump administration would drive the dollar up strongly against emerging currencies.(economy policy)

But, the greenback has instead taken a beating on fading hopes that President Trump will be able to push through deep tax cuts and massive infrastructure spending.

That has brightened the outlook for Asian currencies.

Strong Chinese economic data over recent months has cooled worries over the yuan's weakening, leaving further scope for the People's Bank of China (PBOC) to tighten the country's domestic liquidity conditions.

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