 |
| Platinum vs Gold |
Gold is now at two year low and trading below
to its 200 DMA, it posted biggest fall in percentage terms after 1981.This time
the trigger came from a small Island Cyprus, which says possibility of Gold reserve sales worth half a
billion dollar. It actually triggers the panic button for gold investors when
it start downside trend in early Feb this year. The worry is more about PIGS
(Portugal,Italy,Greece,Spain) nations, which is holding gold worth
$160B. Investors and fund managers across the financial spectrum fear that any
measures to offload gold reserves from these countries to cut their debt to GDP
ratio will bring the gold price at halt and further deep cut. Together PIGS nations has debt to GDP ratio at alarming
124%.Prospect of further selling and loosing shine among big investors like
George Soros and Paulson create a bearish mood in gold market, which fueled by
lower forecast by all the major banks.Till Wednesday its been reported Mr.Paulson got a hit of $1B,when he remain invested while Mr.Soros take out money from the table.
It was a complete mayhem across the dealing
room of bullion dealers and electronic exchanges, in MCX its most active
Contract registered its biggest three day session loss, it fell by Rs3914,
13.5% from Thursday closing when the Cyprus news broke out in market .But this all
happened in quick session, biggest crash registered ever in last more than 30
years. Gold has history to correct itself from big fall, but this time it has
shown no remorse for investors. Millions are reportedly wiped out from books
and heavy selling witnessed in market. But
that’s not the all story, continuous recovery in US economy, strength in US$
and boosted equity market signaled the bull days are over for gold, which it
enjoyed from last 12 years. It all comes at a surprise pack for India; as our
CAD is constitute of nearly 30% due to Gold imports. But this is not all over
for gold yet, as per reports and charts http://t.co/Y9VBiIpgJu
it suggest more downside is left in gold market and in Indian market one could
not rule out the possibility of 22,500 /10grms or even up to 19k.You can read the entire research
report here bit.ly/114vRhD
Your bullion dealer will suggest you to buy
gold at this point of time but this is not the time to buy gold in market. for
investors in precious metal and jewelry consumed Indian society instead platinum
(White Gold) is a better option, first it has more substance in looks and more solidarity
than gold, second platinum was quoted double till 2008 summer, until it lost
its value and comes at par with gold in economic turmoil, as reported in report,
the technical indicator and economic recovery in US shows platinum will give
better return than gold. Platinum is also used in many sectors which are
directly linked with economic growth, so it will move faster than gold in
coming months or years. SIP is a better option for retail investors and data
from NSEL suggested that their e-gold product has shown large participation
among retail investors. Gold in Indian culture is not only considered as assets
but empower the women financially, it helps to cater need in financial crisis
for households.
Gold has outperformed in INR than US$, due to devaluation
of our currency, but now it seems rupee is heading for 6-7% recovery in coming
months, this will also impact gold prices in India and will further push it
towards downside. During a period of 99-01,market seen brown bottom, when UK
sold gold worth $3.5B,after gold given negative return for 20yrs,Historically
gold has seen 20yrs bear run post 1980’s price spike and later 12 yrs bull run.
Also after indicating fund inflows from cheap money available by FED QE program
(Bond Purchase program of US Central Bank) gold is now witnessing opposite
today, it may bounce back in years or months, but this is bear territory in
which gold has entered and not a perfect time to buy gold.
For investors they can opt for SIP in E-Gold or
Platinum as an option for jewelry and investment, but surely not at these
levels. One can wait till it comes to 19k level and can find it bargain hunting
price. Till than it can shuffle between ups and down but not fully corrected
until that day comes when Gold again enter the Bull Run and shine as it did in
past.
Disclaimer: The views and suggestions are
entirely of writer, which do not amount for any investment decision. Please
consult your financial adviser before taking any investment decision of own. For
any further information you can contact me @ amitdaga.gwl@gmail.com
Image Source: Google
No comments:
Post a Comment