Gold is getting scarce

Today’s Daily Byte

It’s been another great day for Indian markets, and many people are watching in disbelief as the markets continue to climb the 'walls of worry.' A lot of cash is still on the sidelines, waiting for a correction or dip. Several mutual funds, institutional investors, and High Net Worth Individuals (HNIs) have moved to cash or significantly increased their cash holdings. In fact, a well-known mutual fund has increased its cash exposure to nearly 20%.

Who can blame them? Even Warren Buffett is sitting on a lot of cash. The world seems flush with funds, and with the rate-cutting cycle beginning, liquidity is unlikely to dry up. As interest rates drop, more liquidity will enter the system, and credit will become easier to access. So, waiting for a market correction to deploy funds may not be the best strategy.

Let’s dive into today’s analysis in the video below.

Reading Time : 4 Minutes

Gold is getting scarce

The world’s gold supply is dwindling at an alarming pace. While gold exploration budgets continue to rise, the number of new gold discoveries has plummeted. In the decade from 1990 to 1999, there were 183 discoveries. However, this figure has declined dramatically in recent years, with only five discoveries made in the last three years.

This trend is particularly concerning given the increasing demand for gold, both from investors and central banks.

Reading Time : 3 Minutes

Projections usually go wrong!

The market is currently predicting a gradual decline in the Fed funds rate over the next two years. As of 24 September 2024, the rate is expected to decrease from 5.19% to 4.22% by the end of 2024 and to 2.94% by the end of 2025. This forecast is based on the belief that the Federal Reserve will gradually ease monetary policy to support economic growth and combat inflation.

Reading Time : 3 Minutes