Gold Market Commentary

A number of factors are affecting the gold market in the short term. Some of them include the tax treatment of precious metals in the United States and the midterm elections in the U.S., which are scheduled for November and December. The article also discusses the net 50 metric tons of gold purchased by central banks during November, which could have a negative effect on the price of gold in the near future. In addition, the article looks at the retail demand for gold in India, which remained muted in December.

Indian retail demand for gold remained muted during the month of December

India’s retail gold demand remained muted in December, which is traditionally the seasonally quieter month for buying. Demand was expected to pick up during the last two weeks of the month, but has slowed significantly in urban and rural pockets.

Local gold prices rose to an all-time high for the week, but remain a bit below their record highs from August. The market continues to be in a discount to landed cost, but buyers are expecting it to weaken in the coming weeks.

Prices are trading around Rs 30,865 per 10 grams on Friday. That’s a discount of over Rs 180 from the previous two-month low. This is in sharp contrast to the previous week’s strong premium.

U.S. midterm elections unlikely to have any meaningful impact on gold prices

Midterm elections in the United States are underway. There are a number of important races that will have an impact on the country. These include governors’ and congressional races, along with the presidential election.

During a midterm election, voters are given a choice to determine which party will control the Senate and House of Representatives. In addition, the legislature votes on new laws. This year’s midterms have been notable for the number of competitive House races.

The Democratic Party appears to have a few major wins. Governors Gretchen Whitmer and Tony Evers have been re-elected in Michigan and Wisconsin, respectively. Democrats also took back control of the Minnesota Senate.

In the House of Representatives, Republicans picked up a single incumbent. They also lost several close races. A small red wave may be in store for Congress.

Central banks bought a net 50t of gold in November

During November, the World Gold Council reported that global central banks bought a net 50 metric tons of gold. This is a record amount for a single month. That’s up 47 percent from the 34 tonnes they purchased in October. The increase in demand for the yellow metal was attributed to more volatile equity markets, and increased inflation.

Historically, China is the largest buyer of gold, accumulating about 1,448 tonnes over the last twelve years. However, analysts aren’t sure if the Chinese government is buying gold in order to de-dollarize the country. In reality, they could be diversifying their foreign exchange reserves.

In a study by the World Gold Council, they found that demand for gold is the highest it’s been in 55 years. Demand includes jewellery consumption, technology and other investments.

Interest rates will likely remain a key driver for gold in the short and medium term

Despite the fact that the price for gold IRA companies has been gaining in recent months, it will still face many headwinds in the future. Gold prices are expected to decline in 2015, resulting in the first annual loss in over a decade. However, there are some factors that could boost gold prices in the long run.

Inflation remains a serious concern worldwide. Global economic growth is projected to improve in the coming years. Moreover, inflationary expectations may increase. This will also mean that the rate of interest in government bonds will fall. Therefore, gold and other risk-on assets may be unattractive.

A large increase in worldwide government debt is another factor that may weigh on gold prices. Similarly, the global pandemic has led to a surge in key energy and commodity prices.

Tax treatment of precious metals in the United States

If you’re thinking about investing in gold or silver, you may wonder about how the tax treatment of these assets works. This article provides an overview of the laws that apply to the purchase and sale of these precious metals. Depending on where you buy them and how you sell them, you may pay a lot more or less in taxes.

Gold and silver are considered capital assets by the IRS, which means that you’ll be taxed on any gains you make. However, the IRS also treats these investments differently from regular capital assets.

In addition to capital gains, you’ll also have to pay state sales tax on the purchase and sale of physical gold and silver. Additionally, the tax laws can vary considerably from state to state. While a few states have removed their sales tax on bullion purchases, others still charge it.

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