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How High Can Gold Go?

by Paul watson
written by Paul watson

2020 has seen unparalleled levels of international monetary disruption due to the COVID-19 pandemic. Share market segments collapsed and the price of gold rose by 15% in merely a number of months. Some state this is typically the beginning a bull run especially now, with Bank of America now predicting gold prices reaching S$3, 000/oz.

Let’s look at the case for gold reaching highs of $3,000 before the end of the year

There are over 4 million cases of COVID-19 and more than 400,000 deaths worldwide. Not only is COVID-19 a health scare it has also been particularly disruptive to the global economy. Countries went on lockdown for weeks and only now a few of them are re-opening their financial systems. However, we might be glad to get the economy going but the risk of a second wave of infections is high. The problem is that this is a new virus that scientists are still trying to figure out, so we might be a long wag away from a successful vaccine and successful remedies.

Recently Goldman Sachs stated: The downturn will end up being 4 times worse than the International Financial Crisis (GFC). In the U.S economic activity dropped by 35% in second-quarter and unemployment may hit 15%.

The IMF forecasts around the world GDP would go down to less than 3% this year and recuperate to be able to +5. 2% within next year if pandemic ends by the second half of 2020. The particular coronavirus health problems can be followed by a coronavirus debt crisis. Global government authorities have responded to COVID-19 with substantial stimulus packages and therefore resulting in the printing of trillions of dollars in new money.

Bank of America (BoA) predicted that gold would hit $3, 000/oz by October 2021. BoA stated that with an official recession on the rise monetary authorities will be poised to buy gold in large amounts of financial assets and increase the sizes of their balance sheets.

Global gold supply is already having difficulties increasing each and every year and it will become more difficult plus more costly to find more gold.

Precious metals like gold perform best any time interest rates are reduced, and today we certainly have historically low rates.

 Historically, the yellow metal has proven to be able to be the most effective safe-haven.

The reduction in gold demand in China and India may affect the price of gold. Jewellery takes up the most amount of gold produced. The demand might have declined over the last decade it still make up for 50% of the total global gold demand.  

A more powerful US dollar may suggest a lower gold price.

Recovery from COVID-19 may be quick, and could improve and lower sentiment towards gold investment.

The BoA might be right in saying the Federal Reserve cannot print gold. The scarcity of gold in addition to a centuries long-held belief of gold being a preserver of wealth, implies investors will constantly seek gold. If only we could meet the global demand that grow year on year but we can’t. Whilst gold supply dwindles, fiat currencies like the US dollar flood the market as printing presses run 24/7 to print new money.

Whatever happens, it would be wise for investors and to buy gold as a hedge against the collapse of the global economy and fiat currencies.

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Finance

4 amazing rules to trade the gold market like a pro

by admin
written by admin

Trading gold is the dream job of many people. You might take the trades in the currency pairs but when you can say you trade gold for a living, it sounds cooler. Well, it’s not about the fancy wording, but rather about the profit factors. Gold trading can be extremely profitable and easy due to the nature of the asset. However, rookies in the UK don’t have the skills to trade gold with a high level of accuracy. They are making silly mistakes and losing a decent amount of money. But if you stick to 4 simple rules you can trade the gold like the professionals. Let’s dig into the detail.

Find the trend

You should have the ability to find trends in the market. Without finding the trend in the gold market, it is nearly impossible to make a big profit. Elite traders can change their lives because they know the proper way to analyze the trend. Trend analysis needs to be done in the daily time frame. Only then you will be able to advance to the next stage. When you analyze the trend, make sure you are not listening to rumors. Use the daily chart and try to find a suitable trading spot.

A valid trend line needs to be drawn based on three connecting points. If you miss the connecting points in the trend line, it will be nearly impossible to make a big profit. Use the demo platform and draw the trend lines in different time frames. After you build the confidence to draw the trend line, you will be able to make some great progress.

Simplify your trading method

You must simplify the trading method to survive in the trading industry. If you trade with a complicated trading method, it will be tough to make progress. The professional traders are not able to trade in the lower period because they know a lower time frame doesn’t have a high win rate. However, rookies try to place the trade in the lower chart with the hope that they can take advantage of the market volatility and make a big profit.

Analyze the news

The professional traders always analyze the news. They often use the professional platform from Saxo since it has an integrated news option. If you are looking for a great platform get it here. Once you have access to the live news feed, it won’t be hard to make some big profit. During the news analysis, you need to focus on the economic news of the country that produces the most gold. Focus on the U.S dollar index as well, since the price of gold is measured in U.S dollars. After learning about the complicated method to analyze the major news, you are going to make a decent profit at the market volatility. Take advantage of the news factors to make some serious cash trading gold.

Trade with a valid routine

You have to trade the market with a valid routine to make progress. Professional traders have a very organized trading routine by which they take the trades and make some huge profit. Creating a trading routine might be a challenging task but if you follow the core concepts of trading, it won’t be hard. Take help from the professional traders and they will guide you and help you create a simple trading routine. Things might be tough at the initial stage, but once you care about a trading routine, you will feel the change in your trading method.

Success depends on your approach. If you trade in an organized way, you can expect to make some serious cash. Stop thinking about the low-quality trade setups and trade the market with discipline. Learn new things form the losses you face in gold trading.

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Finance

What Are Indirect Taxes And How Have They Changed Since 2017

by Daniel Pauly
written by Daniel Pauly

An indirect tax is a tax that is collected at some stage in the supply chain and paid to the government, but its value is passed on to the end customer by adding its value to the price of the good. In other words, these are called “indirect” because the tax on one person/entity is paid by another. The goods and services tax (GST) refers to an indirect tax which replaces several other indirect taxes (like excise duty, customs duty, luxury tax and entertainment tax).

India adopted the GST Act in 2017, and in the three years since then, GST and its several amendments have revolutionised the taxation system in the country. This article throws light on the origin of GST and how things have changed from 2017 until now.

GST in India

Characteristics of GST

  1. GST is a destination-based or consumer-based tax. This means that the tax is collected at the place where a good is sold, not where it is produced.
  2. One of the main advantages of GST is that it eliminates the cascading effect of taxes. Earlier, the central government would charge excise duty and state governments would charge VAT on top of that. GST removes the levying of “tax on tax”.
  3. GST has also made the taxation system more transparent by digitising the entire process, including registration, payment, and filing of returns. E-commerce businesses and others with a large enough turnover have to register themselves on the GST portal, apply for a unique GSTIN number, and check their GST status.

Components of GST

Three different taxes are levied under GST in India:

  1. IGST (full form: Integrated GST): Collected by the central government for inter-state sales
  2. CGST (Central GST): Collected by the central government for intra-state sales
  3. SGST (State GST): Collected by the respective state governments on intra-state sales

GST Tax Slabs

One of five tax slabs is applied to almost all goods and services (except petroleum products, alcohol, and electricity) under the GST Act. Here are some examples of the different tax rates:

0% (7% of goods and services) – Essential goods like milk, bread, fruits, vegetables, and agricultural services.

5% (14% of goods and services) – Apparel (below INR 1000) and footwear (below INR 500), packaged foods, kerosene, coal, and economy air tickets.

12% (15% of goods and services) – Indoor games, business-class air tickets, and edible items like frozen meat products.

18% (43% of goods and services) – Biscuits, electronics, smartphones, AC and luxury restaurants.

28% (19% of goods and services) – Luxury items like washing machines, automobiles, and sin goods like tobacco, pan masala etc. Some goods in this slab have an additional tax called compensation cess, collected by the central government. This is given to the states heavy in manufacturing that lose a lot of revenue since GST is destination-based.

These tax rates undergo periodic revisions based on economic requirements. For example, to boost the hospitality sector, the GST council revised the tax slab for hotel rooms charging less than INR 1000 per night to 0%. Similarly, to stimulate the automobile sector and to increase the production of electric vehicles, the tax rate has been reduced to 5%.

Exemptions and Concessions

As mentioned before, goods like petroleum are exempted from GST and are taxed as per the state-wise VAT rates. Similarly, if your business has a turnover of less than INR 40 lakhs (10 lakhs for north-eastern states), you are exempt from the GST and are charged at a nominal rate. Agricultural services, educational services, certain transportation services and government services like those provided by the Reserve Bank (RBI), services provided to diplomats (including the UN) are some of the services which are exempt from GST.

During the recent COVID-19 pandemic, the Finance Minister announced several relaxations in the taxation system. These include extensions for filing returns and linking the Aadhaar and PAN details and not charging a penalty for late payment of GST.

Conclusion

As an Indian taxpayer, you must be aware of all the taxation laws and regulations that impact you directly or indirectly. If you are a small businessman, a lot of GST reforms would have been extremely confusing to grasp. That’s why a lot of companies have taken the initiative to launch software services to businessmen to guide them not only about GST but also about taking their business online.

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