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Gold had a blockbuster Dhanteras this year

old sales have bettered pre-Covid levels this Dhanteras on Tuesday at 50 tonnes, almost 20 tonnes more than the 2019 Dhanteras on the back of widespread vaccination, fewer infections, and lower price of the yellow metal.

Dhanteras had remained muted last year when local restrictions, fear of pandemic and non-availability of vaccine made most people away from stores while gold consumption on 2019 Dhanteras was about 30 tonnes, according to trade body India Bullion & Jewellers Association (IBJA) whose gold rates are used by the Reserve Bank of India to fix the price of sovereign gold bonds.

“But this year, Covid cases have declined and most of the people have got at least one dose of vaccine,” Surendra Mehta, national secretary of IBJA, told ET. “There are no local restrictions now. Moreover, gold prices have softened, which created a positive sentiment about gold among people.”

The price of gold on Dhanteras day was around ₹47,904 per 10 grams while it was hovering around ₹51,500 last year.

Digital gold players also witnessed a strong demand with people booking gold of ticket size of ₹3,000-4,000 to celebrate Dhanteras, the first day of Diwali festival, when buying gold and other metals is considered auspicious.

Gold was on bull run after the pandemic outbreak last year.

Gold demand surges 47% in July-Sept

(This story originally appeared in on Oct 29, 2021)

CHENNAI: Demand for gold may have dropped 7% globally during the July-September quarter, but there was no dent in purchases of the yellow metal in India, rising 47% to over 139 tonnes by volume. The growth was driven by falling Covid infection rates, which pushed people to venture out and shop, the latest report by World Gold Council (WGC) said.

WGC’s regional CEO (India) Somasundaram P R said, “Gold jewellery demand increased by 58% to 96 tonnes, while investment demand for bars and coins also grew by 18% in a quarter that tends to be seasonally subdued due to monsoons.” Inauspicious periods like Pitru-Paksha are also known to keep buyers away.

In the Indian market, gold demand by value stood 37% higher at Rs 59,330 crore in second quarter of this fiscal year, as compared to the previous year. The total investment demand rose by 27% at 42.9 tonnes.

Protecting corporate data: The gold mine for cyber criminals in India

By Amit Nath

In a digital world, information is the new currency. Any loss or theft of this information can lead to irreparable damage in terms of overall competitiveness. In an increasing connected world, Indian CIOs are discovering that the network now ends with the user’s device, which makes it even more difficult for CIOs to prevent theft of data – intentional or unintentional.

A growing economy and a fast rising Internet population make India one of the most attractive targets for cyber criminals. For example, a recent research report points that India is the number one host country of Botnet-related malware in Asia. It is also the number one in Sality malware (botnet) contributor in Asia in H2 2014.

India, also happens to be one of the top 3 contributors of the Ramnit malware (botnet related) globally. These statistics indicate a dangerous trend. It points to an increase in the amount of malware designed to extort money from unsuspecting mobile phone and PC users. Malwares like Botnet, Ramnit and Autorun are designed to hack into various devices to steal data, banking credentials, cookies and other vital information. Hence, as India’s smartphone and Internet base rises, the number of malware directed at Indian firms will continue to rise.

Exploiting vulnerabilities

Today, companies are still spending significant sums on perimeter security systems, even though recent market changes require the protection and control of an area that has previously been ignored i.e. securing the data. Unfortunately, many CIOs don’t know how or where to begin to implement effective measures to secure sensitive data and avoid information breaches.

Industry reports indicate that vulnerability-leveraging malware is a big area of concern for CIOs today. The number of attacks targeting existing software vulnerabilities is on a continuous rise with 4 out of 5 cyber attacks on businesses coming from bugs in outdated software. Malware creators are quick to spot these opportunities and create malware that scan unpatched operating systems and 3rd party applications and software and try to exploit their vulnerabilities.

One type of such a malware is a ‘exploit kit’. These toolkits are planted on compromised websites that exploit vulnerabilities on a site visitor’s device in order to silently drop malware onto his or her machine. Similarly, malware targeting vulnerabilities in the Java or Windows platform are still very effective, as people continue to use unpatched versions of the popular development platform. On mobile platforms, Android is still the number one target.

These vulnerabilities are inspiring malware authors to create unique types of malware. Malware authors today are not content in only stealing data; they also make sure that the original user pays for the data he owns. For example, ransomware, a type of malware that has increasingly become common, encrypts files and holds it for ransom. The user cannot get the data back in the original form without the decryption key held by the attackers.

What can be done?

The good news is that about 80 per cent of top 10 malware can be avoided with up-to-date software. Yet software seems to be left unpatched, leaving the business environment open to attacks. It is, therefore, more important than ever for the CIOs to keep all software patched and up to date.

CIOs can take a look at automatic patching tools that can make this much easier for the IT admins. These tools, which can be looked as a unique way to easily and automatically deploy security updates for 3rd party software, can enable automatic updates and offer protection against emerging security threats.

 

The tools scan computers for missing software updates, and keep Windows and 3rd party applications up to date and patched from vulnerabilities. They also offer automatic deployment and also the possibility of exclusions and manual deployment.

As most businesses use Wi-Fi, it is important to implement tools that enable organizations to create a secure, encrypted connection from the user’s device to the Internet. CIOs must ensure that the user’s connection is invisible in the Wi-Fi network and the data is unreadable.

CIOs must also implement dynamic proactive behavior-based analysis technology that efficiently identifies and intercepts malicious behavior. This can help in detecting new or unknown malware intrusions based on unusual, suspicious changes in the system and automatically block processes that deviate from standard behavior.

Just as a strong immune system in a human body can prevent the most dangerous of diseases, the most deadly viruses and malware can be kept out of most networks if we take advantage of the tools and technologies available at our disposal to automate and improve the process of patching systems regularly.

(Amit Nath is Country Manager, India & SAARC, F-Secure.)

Gold jumps by Rs 264; silver climbs to to Rs 58,825

New Delhi: Gold in the national capital on Wednesday rose by Rs 264 to Rs 45,123 per 10 gram with recovery in global precious metal prices along with rupee depreciation, according to HDFC Securities. In the previous trade, the precious metal had settled at Rs 44,859 per 10 gram.

Silver also jumped Rs 362 to Rs 58,825 per kilogram from Rs 58,463 per kilogram in the previous trade.

The Indian rupee declined 13 paise to 74.19 against the US dollar in opening trade on Wednesday.

In the international market, gold was trading with gains at $1,739 per ounce and silver traded flat at $22.26 per ounce.

“Gold prices pared some of the previous losses on Wednesday after falling to seven-week lows,” according to HDFC Securities, Senior Analyst (Commodities), Tapan Patel.

Navneet Damani, VP – Commodities Research, Motilal Oswal Financial Services said, gold prices traded steady after inching lower in the previous session, weighed by a rise in the dollar and US Treasury yields.

What happens to your gold jewellery in gold monetization scheme?

The government’s Gold Monetisation Scheme (GMS) allows you to deposit your idle gold with a Reserve Bank of India (RBI) designated bank and earn interest on the same. This works similar to a bank fixed deposit. Depending on the tenure of the GMS one opts for, one can earn up to 2.5% interest per annum.

The scheme was launched by the government in 2015 with an intention to put the idle gold stored by inpiduals in their homes and bank lockers to productive use. However, the scheme did not find many takers -one of the main reasons being what happens to the gold you deposit with the bank.

What happens to the gold deposited under GMS?

As per the scheme rules, the gold – jewellery, bullion, artefacts – is required to be deposited with the bank and in turn, the bank will test its purity. Once the purity of the gold jewellery is ascertained, they will melt the gold jewellery and convert it into bullion or gold coins.

Thus, if an inpidual deposits jewellery like gold bangles or necklace with the bank to earn interest on it under the scheme, then at the time of maturity the bank will not be returning the deposited gold in the same shape and form.

This seems to be the main reason why many haven’t opted for this scheme because for many Indians gold jewellery has sentimental value attached to it. They want the gold to be returned in the same form as it was deposited.

Further, keeping gold jewellery at home offers financial security to many in case of emergencies. An inpidual may find it easier to sell his/her gold jewellery to a local jeweller in case of a medical emergency or in the event of income loss than find a buyer for gold bonds in the secondary financial market. Also, while selling gold, inpiduals are not required to undergo Know-Your-Customer (KYC) process.

Harshad Chetanwala, Co-founder, MyWealthGrowth – a financial planning firm says, “There are a few reasons why the scheme did not receive the response expected. Investing and saving in gold is very traditional in India and in some parts of the country it is like culture. There was a lack of willingness to monetise this gold which was accumulated over years. As per the scheme, this gold was getting converted into bullion and coins, so the accumulated gold bought over the years in different shapes and forms is lost as soon as you deposit the gold. There was a lack of awareness and information about the scheme as well. In India, most of us buy gold to hold it for the long term and this purpose too, somewhere, was getting defeated in the scheme.”

Will depositing gold in GMS suit you?
For the above reason, someone who has bought and stored gold jewellery for future use, like children’s wedding etc. may be hesitant to invest in GMS. Further, if someone is keeping gold as a quick easily liquefiable monetary backup for a rainy day, then too, they may not view GMS as very suitable.

However, those buying gold purely as an investment may find GMS of interest. A key challenge with physical gold is safe and cost-effective storage. While gold’s value surely grows, storing it physically in bank lockers comes at an additional cost. Also, gold kept in lockers is not insured by the bank offering the locker.

Some financial experts are of the view that GMS is a safer option for storing gold (in terms of the risk of theft/loss) which comes with the added benefit of earning interest on the deposit. Added to this, there is the tax advantage.

Features of the scheme
According to the State Bank of India’s (SBI) website, GMS is available in three tenures: Short Term Bank Deposit (STBD), Medium term Government Deposit (MTGD) and Long term Government Deposit (LTGD). The minimum deposit of gold starts from 10 grams with no limit on the maximum deposit.

Under STBD, one can place gold deposits for 1 to 3 years, under MTGD, deposits can be placed for 5 to 7 years and under LTGD, the tenure is 12 to 15 years. As per SBI website, the current interest rates are as follows:
The depositor will earn simple interest annually which is paid out or cumulative interest (Compounding annually) depending on the investment option chosen at the time of depositing the gold.
1. In case of STBD:

  • For 1 year: 0.50% per annum
  • Above 1 year up to 2 years: 0.55% per annum
  • Above 2 years up to 3 years: 0.60% per annum

2. Rate of interest on MTGD: 2.25% per annum
3. Rate of interest on LTGD: 2.50% per annum

On maturity, repayment can be taken either in gold or in money equivalent. “However, 0.20% as administrative charges will be levied in case of redemption in gold,” as per SBI website.

Penalty is applicable if the deposit is broken before the maturity. The rules of premature payment are as follows:

  • STBD: Allowed after a lock-in period of 1 year with a penalty on applicable interest rate
  • MTGD: Allowed to be withdraw any time after 3 years with penalty on interest
  • LTGD: Allowed to be withdraw any time after 5 years with penalty on interest

Interest earned is exempt from capital gains tax, wealth tax and income tax. The RBI designated banks include ICICI Bank, Corporation Bank, Union Bank of India, Indian Overseas Bank, Punjab National Bank, State Bank of India, HDFC Bank, Yes Bank, Dena Bank, -Bank of Baroda.

However, do keep in mind that interest on gold deposits will be calculated in monetary terms rather than in terms of gold. This would mean that no additional gold will be added to your deposits rather you would be paid in monetary terms with reference to the value of gold at the time of deposit. This change in interest calculation has been done in April 2021.

India’s gold imports surge nearly 8 times in September as prices drop: Source

India’s gold imports in September soared 658% from last year’s lower base as a correction in local prices to the lowest level in nearly six months prompted jewellers to step up purchases for the upcoming festive season, a government source said.

India imported 91 tonnes of gold in September, compared to 12 tonnes a year earlier, the source said on Monday on condition of anonymity as he is not authorised to speak to media.

In value terms, September imports surged to $5.1 billion from $601 million a year ago, he said.

Addition of gold reserves from 2018 will help India’s sovereign rating: IIM-A study

RBI’s addition of gold reserves from 2018 will help the sovereign rating of India, a research by Indian Institute of Management-Ahmedabad released on Friday said. The study of 48 countries by the premier institute’s ‘India Gold Policy Centre’ for two decades ending 2020 said high levels of central bank gold reserves have a strong impact in reducing the sovereign credit risk of that country in international markets.

“In the current scenario, the findings therefore seem to have positive implications for India,” the study by doctoral student Sawan Rathi and professors Sanket Mohapatra and Arvind Sahay, said.

The researchers considered five-year sovereign credit default swap (CDS) spreads for 48 advanced and emerging market countries over a 20-year period, from 2000 to 2020 for measuring the economy’s default risk, as per an official statement.

The data was mapped against information on Central Banks’ gold stocks obtained from the World Gold Council database, it added.

“In 2020, Moody’s downgraded India’s sovereign rating to Baa3, highlighting its weak fiscal position as the primary cause of credit restriction. The findings of this cross-country study suggest that higher central bank gold reserves can help in stemming a further deterioration and provide support to the credit ratings of countries such as India,” Sahay, who chairs the centre, said.

Mohapatra said there has been a general increase in RBI’s gold reserves since 2018, and added that these reserves have been known to aid in persification of overall international reserves and may boost returns during extremely low or negative international interest rates.

“Our study shows that they can also have a positive impact on sovereign creditworthiness, particularly during times of financial market volatility and crisis episodes,” Mohapatra said.

A more active involvement of gold can persify India’s overall international reserves portfolio, he said, sounding optimistic about gold playing the role of a stabilising agent in India’s external position.

Sept trade gap at 14-year high, goods exports grow 22.76%

India’s merchandise trade deficit widened to a record $22.59 billion in September, the highest in at least about 14 years, official data released on Thursday showed.

Led by petroleum products and engineering goods, India’s merchandise exports in September rose 22.76% on year at $33.79 billion, slower than 45.17% growth in August. Data released by the commerce and industry ministry showed imports growing at a faster pace of 84.77% at $56.39 billion. Trade deficit was $2.96 billion a year ago.

“The sharp rise in the merchandise trade deficit in September reflects an element of inventory stocking ahead of the festive season as well as advancement of crude oil purchases in light of the looming hardening of prices,” said Aditi Nayar, chief economist, ICRA.

Untitled-7Agencies

India’s overall exports (merchandise and services combined) grew 21.44% on a year-on-year basis in September to $54.06 billion. Exports rose 29.8% as compared to September 2019, before the pandemic struck.

The services data for September is an estimation, which will be revised based on the Reserve Bank of India’s subsequent release, the ministry said. Of the 30 major commodity groups, 22 showed an increase in outbound shipments last month.

“Recovery in the global economies across the world added with the expectation of buoyant order booking position for the coming months specially during the festive season has also led to such continuous growth in exports,” said A Sakthivel, president, Federation of Indian Export Organisations.

Sakthivel said the body has also urged the government to provide freight support to all exports till March 31, 2022, as freight rates have skyrocketed and are likely to sombre by then. Cumulatively, the first six months of India’s goods exports at $197.89 billion is close to the proportionate target of $400 billion for FY22.

( Originally published on Oct 14, 2021 )

Gold demand to stay subdued, rebound likely only next year: WGC

Gold demand is likely to be more subdued than expected in 2021, following India’s prolonged battle with Covid-19, said the World Gold Council (WGC). There is a possibility of a rebound in gold demand next year, it said, although any future outbreaks could create further uncertainties.

In the long-term too, gold faces challenges as households are saving proportionately less than they used to, which may reduce the amount of capital they allocate to gold, said a WGC report on ‘The drivers of Indian gold demand’. Simultaneously, it said, financial inclusion is increasing, which provides investors with other sources for their savings beyond physical gold which too may impact the appetite for gold in the country.

The report said that government policies can impact gold demand and inadvertently foster India’s unofficial market, indicating that any increase in import duty on gold in the coming days may open doors for smuggled gold. At present, gold attracts an import duty of 12.5%.

Rural India, which accounts for 60% of the country’s gold consumption, may spend lower than usual on gold as agricultural wages are still in decline, despite government actions in recent years, said the WGC.

But there are positive factors too, which may drive gold demand in the long term, said the report. The rapid growth in the working age population over the next two decades will create a strong and sustained demographic pidend. Secondly, continued urbanisation will drive and support economic expansion. And thirdly, higher penetration of both the manufacturing and services sectors in rural areas will reduce the reliance on agriculture and deliver more stable incomes for millions of households.

Commodity strategies: Gold, silver, crude, base metals

Ravindra Rao

MCX

Gold futures edged higher but settled well off the high on Friday. The price rallied towards the 200- DEMA (Rs 47,380) after breaching the trend line resistance at Rs 47,000 following a weaker than expected US job report but retreated later in the session as the 200-DEMA holds the key resistance. Similarly, 20-DEMA at Rs 46,600 is acting as a good support. The medium-term momentum has turned positive as the MACD index generated a crossover buy signal. The MACD histogram is in a positive territory within an upward sloping trajectory which supports the higher price trend. To conclude, price is expected to consolidate in the wide range of Rs 46,600-47,380 with a sideways to higher bias. Only a close above Rs 47,380 would bring renewed buying interest in the yellow metal and push it higher towards Rs 47,800. On the flip side, a failure to hold above Rs 46,600 would weaken the trend and price might test the next support around Rs 46,450-46,200.

Trading Range: Rs 46,600-47,380

MCX Silver prices witnessed a quick rebound after testing the lower band of the regression channel and hit the higher band near Rs 63,000. The trend in silver is still on the weaker side as the downward sloping channel is still intact. However, a bullish candlestick pattern near the support line along with positive pergence in RSI could reverse the bearish trend. The immediate resistance is at Rs 63,200 (50-DEMA). A close above Rs 63,200 might lead to a resumption in its recovery rally towards Rs 64,200. Support is at Rs 60,000 (midline of the regression channel) below which the bears may target Rs 58,200 (recent bottom). From the above, we expect the price to trade in the range of Rs 60,000-63,200 with a sideways to higher bias. A close above Rs 63,200 may intensify the bullish momentum towards Rs 64,200.

Trading Strategy: Buy MCX Silver Dec at Rs 61,200. Target: Rs 63,200. Stop loss: Rs 60,000

(Ravindra Rao is CMT, EPAT, VP-Head Commodity Research, Kotak Securities Ltd. Views are his own)

Tapan Patel
Here is a look at how different commodities are behaving in today’s market.

Outlook: Bullion
Bullion prices traded steady on Monday with spot gold prices at COMEX near $1,757 per ounce while spot silver prices at COMEX were marginally up near $22.71 per ounce in morning trade. Bullion prices held strong trading range post Friday’s disappointed US job market data. However, the upside was capped after the US 10-year treasury yields rose to 1.61% for the day. The precious metals may get support from inflation worries and US economic growth. Bullion prices may trade sideways to up for the day.

Trading Strategy: MCX Gold December resistance for the day lies at Rs 47,300 per 10 gram with support at Rs 46,800 per 10 gram. MCX Silver December support lies at Rs 60,200 per kg, resistance at Rs 62,500 per kg.

Outlook: Crude Oil
Crude oil prices traded higher on Monday with benchmark NYMEX WTI crude oil prices rising by 1.88% to $80.84 per barrel in morning trade. Crude oil prices rallied on substitute demand from gas and coal consumers over rising prices. The recent surge in natural gas and coal prices globally has increased the demand for crude oil. We expect crude oil prices to trade up for the day.

Trading Strategy: MCX Crude Oil October support lies at Rs 5,980 per barrel with resistance at Rs 6,150 per barrel.

Outlook: Base Metals
Base metals prices traded firm on Monday with positive trading in most of the metals in morning trade. Base metals regained momentum with return of Chinese markets after a week long holiday. However, a stronger dollar against Yuan has pressured some of the metals to trade weak. Base metals may limit upside on lower demand worries from power shortages in China which has led to production cuts from the energy-intensive smelting and fabricating industries. Base metals may trade sideways to down for the day.

Trading Strategy: MCX Copper October support lies at Rs 725 and resistance at Rs 734. MCX Zinc October support lies at Rs 263, resistance at Rs 270. MCX Aluminium September support lies at Rs 236 with resistance at Rs 242.

(Tapan Patel is Senior Analyst, Commodities, HDFC Securities. Views are his own)