Gold and Silver may crash soon, according to an expert

Global Gold Hits All-Time High of $4,000/oz; Experts Fear Imminent Correction Following 37.5% India Rally

Gold and Silver may crash soon, according to an expert

International Gold Hits All-Time High of $4,000/oz; After 37.5% India Rally, Experts Warn of Imminent Correction).

Tuesday saw international gold prices reach an all-time high of $4,000/ounce, continuing the upward trend despite global headwinds. International gold prices have increased by 30% this fiscal year.

Things have been better in India. The yellow metal has increased 37.5% in the current fiscal year. It is up 6% in the first eight days of October alone. \ Nonetheless, analysts see indications that profit-booking may be imminent.

Concerns like the US shutdown and the potential for an Israel-Hamas peace agreement are being closely monitored on a global scale. A possible catalyst for profit booking in gold and silver is the dollar index, which is currently trading at a two-month high and is getting close to the 99 level.

Headwinds worldwide fuel a historic rally

The dollar index increased 1.27% this week and is currently trading at 98.7, according to Anuj Gupta, director at Ya Wealth Global. This is the first indication that gold and silver are ready for profit-booking.

I agree. "Gold is very overbought and vulnerable to a pullback," stated Nigam Arora, an algo analyst based in the United States and the author of the Arora report.

He lists the following as triggers: the dollar's strengthening, the end of the US government shutdown, and the Federal Reserve's October interest rate-cutting decision.

French and Japanese bond yields are increasing, among other factors. There may be a correction in gold prices if a new government in France is able to pass the budget or if the prime minister-to-be in Japan makes it clear that she will not allow fiscal policy to run wild and does not put pressure on the Bank of Japan to lower interest rates.

A sharp correction is indicated by an overbought market.

The price of silver is also steadily increasing, in addition to gold. According to Arora, silver will move 1.7 times faster than gold in either direction. This implies that when the silver price drops, it will do so 1.7 times more quickly.

Given how swift the rally was, the correction, when it occurs, may be severe. Extremely abrupt corrections were observed in the short term during the last few decades in a bull market, but the rally persisted in the medium term.

According to Chirag Mehta, CIO at Quantum AMC, "We can't rule out some correction, even though the underlying factors are still positive for gold given the sharp 30%-odd rally in a short period of time." Similar to past bull markets in the 1970s or 2000s, an overbought market will benefit from a correction of 10–15%. Nonetheless, he thinks that gold investors are fundamentally bullish.

Additionally, Chirag Sheth, principal consultant at London-based bullion research firm Metal Focus, stated that they are still optimistic and that the general momentum will continue.

Income Tax FY-2025: How to Switch Between New and Old Tax Regimes

Until FY 2019-20 (which concluded on March 31, 2020), there was just one tax system with four tax slabs and rates. The New Tax Regime was implemented in 2020.

Income Tax 2024-25: During the Union Budget hearings for fiscal year 2023-24, Finance Minister Nirmala Sitharaman stated that the new tax structure will be implemented as the default regime. This new tax policy went into effect in 2020. The current laws provide that if taxpayers fail to disclose their choice with their employer, deductions will be handled in accordance with the New Tax Regime.

Union Finance Minister Sitharaman emphasised in her speech on Budget recommendations for Fiscal Year 2023-24 that one of the primary goals of the new income tax system is to give individuals more control over their financial management. Rather than using government incentives or punishments to compel decisions, taxpayers are given significant leeway in deciding how to spend their money. 

Nonetheless, taxpayers who choose to cling to old taxation rules have been granted flexibility by measures in Budget 2023, which allow them to switch between old and new regimes. The frequency with which such transitions occur, however, is dependent on certain forms of income.

Salaried Individual

A salaried individual has the ability to choose between the new and old tax regimes many times during the fiscal year. The new tax system provides fewer tax deductions and exemptions than the previous tax regime, which allowed for different deductions from taxable income under Chapter VI A. Section 80C is a well-known and widely applied deduction. 

Profits from business or profession

Individuals who earn a living from their company or profession, on the other hand, can only make one decision. For example, if a person with business income moves from the old to the new system in FY 2023, they will be ineligible to transfer again. Individuals with company income who opt out of the new tax regime will be unable to opt back in in the future.

How can I switch while submitting an ITR?

The Central Board of Direct Taxes (CBDT) recently issued two new income tax return forms for the Assessment Year 2024-25: ITR-1 (SAHAJ) and ITR-4 (SUGAM). ITR Form 1 now contains the option to pick a tax regime. To opt out of the new tax regime, ITR 4 taxpayers (individuals with business or professional income) must complete form 10-IEA.


Previously, people had to complete Form 10-IE to select the new tax regime. However, Form 10-IE, which allowed people to opt into the new tax system, has been terminated. This amendment attempts to make the new tax regime the default setting beginning in the fiscal year 2023-24. As a result, unless people take particular steps to opt out of the new tax scheme, it will apply automatically.

Old vs. New Tax Regime

Individuals can take advantage of a variety of tax breaks and deductions under the previous tax system. Exemptions and deductions often claimed include home rent allowance (HRA), leave travel allowance (LTA), and deductions under Sections 80C, 80D, 80CCD(1b), 80CCD(2), and more.

New Tax Regime

The exclusions and deductions provided under the Old Regime do not apply to the New Regime. If the taxable income (after all deductions) under the prior regime was less than Rs 5 lakh, the person did not have to pay any tax. 

If your taxable income is less than Rs 7 lakh, the full amount would be tax-free under the new regime.

• Income up to Rs 3 lakh is tax-free.
• Income between Rs 3 lakh and Rs 6 lakh is taxed at 5%.
• Over Rs 6 lakh to Rs 9 lakh, it is 10%.
• Over Rs 9 lakh to Rs 12 lakh, it's 15%.
• Over Rs.12 lakh to Rs.15 lakh, it is 20%.
• Above Rs 15 lakh, it's 30%.

Old Tax Regime

• Income Tax Slabs (Rs) Income Tax Rates (%)
• From 0 to 2,50,000: 0%
• From 2,50,001 to 5,00,000 5%.
• From 5,000,001 to 10,000,000, 20%
• From 10,000,001 and above 30% 

Government to sell 7 lakh tonnes of onions by the end of February in order to lower the price per kilogramme to Rs 35.

Onion prices have been bringing tears as domestic prices stay elevated for over 4 months

In an effort to rein in onion prices, which have increased by 48 per cent, the government is amassing a massive buffer stock, which in November contributed to a higher-than-average inflation rate of 5.55 per cent.

The government has already prohibited the edible bulb's exports because general elections are soon.

"We are continuing to procure the commodity to bring it to 7 lakh tonnes, and we have built up a substantial buffer of 5 lakh tonnes." In order to lower prices, we are also offloading this buffer concurrently. When the buffer runs out in late February, prices should drop to around Rs 35 per kilogramme, and by March, they should return to normal levels of around Rs 20, according to Consumer Affairs Secretary Rohit Kumar Singh, who spoke with Moneycontrol.

As of December 12, the average price of onions throughout India is Rs 55.12 per kilogram.

Up until now, the government has purchased roughly 5.10 lakh tonnes of onions and offloaded 2.72 lakh tonnes in expensive markets through both open markets and direct retail sales to customers.

Data indicates that government-held buffers keep prices under control, giving us a strong buffer to step in further. Then, traders are aware that they cannot control the market, according to Singh.

Export ban

In an effort to keep domestic prices under control, on August 19, the Centre decided to buy an extra 200,000 tonnes of onions from farmers while also enacting a 40 per cent export duty on onions. But because prices did not decline much, on October 29 it also announced a minimum export price (MEP) of $800 per million tonnes (free-on-board basis).

"But even with MEP, we observed that over a lakh tonne of exports were made each month because other neighbouring countries' onion prices remained high," the secretary continued.

The MEP was first implemented on December 31 and was later extended to a complete export prohibition through March 2024.

Delays in Kharif arrivals, export restrictions by Egypt and Turkey, hailstorms during Kharif crops, and high global retail prices as a result of availability worries have all been blamed for the price increase.

After the kitchen staple's retail sale price in the national capital surpassed Rs 80 per kg, while prices in the mandis stayed around Rs 60 per kg, exports of this staple were ultimately outlawed. Since July, the Consumer Price Index basket's onion inflation has been in double digits, with a nearly four-year high of 42.1 per cent in October.

Engineering exports affected by global slowdown: EEPC

Overall engineering exports during April to August in 2023 dropped 4.55 per cent to USD 44.62 billion as against USD 46.74 billion in the previous similar period of 2022.

Engineering Exports Promotion Council (EEPC) said that overall exports of engineering goods from the country have been affected by the global slowdown.

Overall engineering exports during April to August in 2023 dropped 4.55 per cent to USD 44.62 billion as against USD 46.74 billion in the previous similar period of 2022.

According to an EEPC spokesman, engineering exports to Russia surged 178 per cent to USD 568.41 million during April to August of fiscal 2023-24, which was USD 204.17 million in the corresponding previous period.

The exporters' body said that some of the major trading partners like the US and European countries have been affected by the global slowdown.

The Russia-Ukraine conflict has also been ongoing, while China is also experiencing a slowdown. All these factors have affected India's engineering export demand, EEPC said.

Engineering exports to the US fell 14 per cent year-on-year during April to August 2023.

EEPC is also of the view that India should sign free trade agreements (FTAs) with non-traditional markets like Latin America and Africa to boost engineering exports.

The FTAs with UAE and Australia have provided a fillip to engineering exports with shipments to both nations rising nine per cent during April to August of the current financial year.

Engineering exports to the UAE during April to August of the current fiscal touched USD 2.24 billion, while that for Australia touched USD 596.14 million.

Commercial LPG prices increased by Rs 209 per cylinder, while ATF prices increased by 5%.

Indian Oil Corporation Limited, a state-owned oil and gas firm, has raised the price of commercial Liquefied Petroleum Gas (LPG). The price has risen by Rs 209 per cylinder. The revised rates will go into effect on October 1. The price of home LPG has remained unchanged.

On October 1, the retail price of 19 Kg commercial LPG cylinders in Delhi would be Rs 1731.50 per cylinder.

LPG is widely utilised as a vehicle fuel, cooking gas, for heating and refrigeration, and even in some high-end industrial operations.

The price of jet fuel, also known as aviation turbine fuel (ATF), was raised by 5%, marking the fourth consecutive monthly rise since July, in keeping with the firming witnessed in worldwide benchmarks.

In August of this year, the Union Cabinet ordered a cut in liquefied petroleum gas (LPG) rates for all 330 million consumers in the country.

"All home LPG cylinder users would receive a Rs 200 subsidy each cylinder." Also, consumers under the PM Ujwala programme would receive this subsidy in addition to the existing subsidy," stated Union Information and Broadcasting Minister Anurag Thakur during a Cabinet briefing on August 29.

The extra subsidy on LPG cylinders was implemented immediately as a Raksha Bandhan and Onam present, according to the minister. As a result, the subsidy for Ujjwala recipients is now Rs 400 per LPG cylinder.

The government also authorised 7.5 million new Ujjwala connections, bringing the total number of Pradhan Mantri Ujjwala connections to 7.5 million.

On September 29, IOCL was again in the headlines for sanctioning two joint ventures with private sector firms to establish compressed biogas (CBG) facilities.