GOLD LOSES GLITTER
Equities beat gold in Samvat 2070; loses safe- haven tag GOLD COINS SOLD OUT
While the equity markets have been booming and have registered a rise of 5,336.29 points or 25.12 per cent in Samvat 2070 — from the mahurat trading day last year to Tuesday, October 21, 2014, gold as an asset class has lost its sheen. Spot gold prices have come down around six per cent from last Diwali defying its safe haven status, said brokerage house Angel Broking in its special Diwali report on gold.
Indian markets celebrate Hindu calender called Vikram Samvat, which begins on Diwali. Samvat 2070 began on muhurat trading day on Diwali in 2013 and ends on October 22, 2014.
Among the main reasons for gold diminishing as a profitable asset class are: the pick- up in the US economy with the labour market and the housing market ( the two biggest sectors in the US) gaining trac- New Delhi, Oct. 21: Precious metal sales sparkled on ‘ Dhanteras’ festival with MMTC- PAMP India on Tuesday saying it has sold out its entire inventory of gold and silver coins.
Dhanteras, the first day of Diwali, is considered to be auspicious for buying gold, silver and other valuables. “We have sold our entire stock of tion. Rising equities in the US coupled with the rising consumer confidence is also denting the appeal for the yellow metal and the PMI numbers from the US since the start of the year has been on the rise as SPDR ( Standard & Poor’s Depositary Receipts) gold trust, the world’s largest gold exchange traded fund saw liquidation of gold holdings by investors.
“Gold holdings have gold and silver coins. We had minted 1.5 lakh pieces of silver coins and 25,000 pieces ( 1.5 tonnes) of gold coins for sale during Diwali,” MMTCPAMP India president ( marketing) Vipin Raina said.
The company has sold both Royal Mint’s gold and silver sovereign commemorative coins as well as normal coins. constantly been declining the last couple of years. As on December 31, 2012, SPDR gold holdings stood at 1350.82 tonnes, a decline of around 552.6 tonnes ( 41 per cent) to 798.22 tonnes in 2013 and the liquidation continued in 2014 registering a decline of 37.29 tonnes ( 4.67 per cent) to 760.93 tonnes as on October 14, 2014,” said the report.
The other global factor that is denting the popu- larity of gold as an investment is China’s diminishing hunger for gold. As the world’s largest consumer of the yellow metal, it has seen a drop in gold demand due to moderation in physical buying following the bout of buying in the previous year.
China’s jewellery demand dropped 45 per cent and demand for bars and coins declined 64 per cent. Similarly, India’s jewellery demand dropped 18 per cent and demand for bars and coins dropped 67 per cent in second quarter of 2014 from the yearago’s number.
Lastly speculative interests have been also liquidating their exposures in the commodity for most of 2014.
As on October 14, 2014, money managers are net longs in the yellow metal at 51,994 contracts, registering a decline of 62 per cent when compared to March 2014 where the speculative interest was at the highest point.