Page 38 - Bullion World Volume 02 Issue 10 October 2022

Bullion World | Volume 2 | Issue 10 | October 2022

Scenario 1 Scenario Period International Gold Price ($) Indian Gold Price (Rs)
Crash in other Asset Starting Ending Days Starting Ending %Chng Starting Ending %Chng
Classes or Mkt
Dot-Com Burst 10-Mar-00 30-Sep-02 934 290 323.9 11.7% -- -- --
2006 Market Crash 12-May-06 14-Jun-06 33 711.8 564.1 -20.8% 10543 8434 -20.0%
2008 Stock and Oil 15-Jul-08 05-Dec-08 143 978.7 750.9 -23.3% 13560 12071 -11.0%
Market Crash
2015 Oil Market Crash 18-May-15 17-Dec-15 213 1227.6 1049.7 -14.5% 27617 24841 -10.1%
2018 Crypto Crash 18-Dec-17 11-Apr-18 114 1263.7 1356.9 7.4% 28470 31355 10.1%
Pandemic Sell-off in 02-Jan-20 20-Apr-20 109 1528.1 1703.4 11.5% 39277 45714 16.4%
Crude Oil
2021 Crypto Crash 14-Apr-21 28-May-21 44 1735.3 1902.5 9.6% 46608 48542 4.1%

Scenario 2: Loose Monetary policy/Risk-off Sentiment
A loose monetary policy aims to expand or grow an economy by decreasing interest rates, lowering bank reserve
requirements, and purchasing US Treasury securities. If the economy is in a slump with high unemployment and
output that is below potential GDP, loose monetary policy can help the economy recover. For example, during the
2008 financial crisis, investors attempted to decrease risk by selling current dangerous positions and transferring
money to cash or low/no-risk investments like US Treasury bonds and Gold.

Scenario 2 Scenario Period International Gold Price ($) Indian Gold Price (Rs)
Loose monetary policy/ Starting Ending Days Starting Ending %Chng Starting Ending %Chng
Risk-off Sentiment
2001-03 FED Interest 02-Jan-01 25-Jun-03 904 270 349.2 29.3% -- -- --
Rate Cuts
2007-08 FED Interest 18-Sep-07 16-Dec-08 455 717 841.9 17.4% 9374 12930 37.9%
Rate Cuts
Quantitative Easing 1 25-Nov-08 30-Jun-10 582 818.5 1245.5 52.2% 13035 18852 44.6%
Quantitative Easing 2 03-Nov-10 30-Jun-11 239 1337.6 1502.3 12.3% 19469 21904 12.5%
2019-20 FED Interest 30-Jul-19 09-Mar-20 223 1429.7 1675.7 17.2% 34529 44353 28.5%
Rates cuts
Quantitative Easing 4 - 17-Mar-20 31-Dec-20 290 1486.5 1893.1 27.4% 39518 50151 26.9%
CARES Act

Scenario 3: Financial Crisis/Recession
A financial crisis is any of a range of instances in which the nominal value of some financial assets drops dramatically.
Stock market collapses, and the bursting of other financial bubbles, currency crises, and sovereign defaults are
further examples of financial crises. In the 19th and early 20th centuries, many financial crises were associated with
banking panics, and many recessions coincided with these panics. Gold has been a clear outperformer during these
times and scenarios of the financial crisis.

International Gold
Scenario 3 Scenario Period Indian Gold Price (Rs)
Price ($)
Financial Crisis / Starting Ending Days Starting Ending %Chng Starting Ending %Chng
Recession
US Subprime Crisis 02-Jan-07 01-Jun-09 881 635.2 979.3 54.2% 9288 14808 59.4%

Great Recession 03-Dec-07 30-Jun-09 575 792 927.1 17.1% 10149 14451 42.4%
European Sovereign 01-Oct-09 01-May-13 1308 1000.1 1446.2 44.6% 15567 26540 70.5%
Debt Crisis
BREXIT 23-Jun-16 31-Jan-20 1317 1261.6 1582.9 25.5% 29914 41000 37.1%
2020 COVID 28-Feb-20 30-Apr-20 62 1564.1 1684.2 7.7% 41397 44906 8.5%
Pandemic Recession

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