Gold and Silver Bullion report | 21st June 2024

Last week, Federal Reserve policymakers indicated that they anticipate reducing borrowing rates only once this year, instead of the three cuts predicted in March, due to the requirement for additional proof that inflation is moving closer to the central bank's objective. Investors, however, have been seeking evidence of a gentle landing that would support US interest rate reductions. Traders were also processing information indicating a 16% decrease in Swiss gold exports in May, mainly due to significant decreases in exports to India and Hong Kong.

According to information on the Swiss Federal Customs Administration website, gold exports from Europe's primary refining center dropped to 103.4 tons in May from 123.6 tons in April due to reduced sales to India and Hong Kong. Shipments to India fell by 43% to 14 tons. There was minimal variation in sales to China, which remained steady at 36.2 tons. 1.5 tons of sales to Hong Kong decreased by 80%. Sales to the UK almost tripled, reaching 15.4 tons. There was no significant change in sales to Turkey at 9.4 tons; Swiss gold imports increased by 14% to 173.8 tons.

 There is a significant and ongoing price difference between gold prices and their calculated values, indicating. Currently, the price per ounce is approximately $500, which is approximately 25% above the anticipated fair value. Central banks from countries like Turkey, China, and India have supported the gold price during periods of ETF outflows. Roughly 20 central banks are planning to increase their holdings in the next year, as indicated by a survey conducted by the World Gold Council. Anticipated relaxed policies from G-10 central banks are expected to continue providing support for gold prices.

Key Perspective: Both gold and silver prices are seeing a minor decrease in trading on the global markets today. Gold and silver prices are anticipated to trade within a range or rise today, as gold saw its largest daily increase in five weeks after breaking out of a narrow trading range, with traders feeling optimistic due to a pattern of weakening US data. this strengthens the argument for the Federal Reserve to shift towards monetary easing in the current year.