Russians Bought 25 Tons of Gold in June, 1 ton a DAY!!

24-Jul-15

Russians Bought 25 Tons of Gold in June, 1 ton a DAY!!

Greetings from Hitesh! Thanks a million for appreciating our balanced view on Mumbai’s Property Market. After reading our post - many investors have got the relief from the Panic created by the AMBIT report.

With the GOLD price touching Bottom of last 4 years – many are worried for the move ahead in GOLD. Let me deal with what we had said on 15^th MARCH 2015 on GOLD.

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What is our call NOW?

Gold prices have come down from around USD1900 in 2013 to USD 1150 per ounce now, fall of around USD 750 in last 2 years. GOLD price of USD 1150 per ounce is near to the manufacturing cost of the mines world over. In fact, one leading mine has already decided to stop the production of GOLD.

We feel down side from here is not more that 10% to 15% in the worst case scenario and upside from here is more than 50% to 100% in the long term. We have already asked our clients to accumulate gold in small lots at regular interval.

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After our call GOLD made USD 1230 by March end and now it made a low of USD 1085. As said above GOLD can go down by 10% (i.e. USD 1035) and by 15% (i.e.USD 978 per ounce).

Morgan Stanley’s Call on GOLD

Recently Morgan Stanley came out with the GOLD Report. They are expecting GOLD to touch USD 800 under certain assumed situations!! Otherwise their call for the year is USD 1190.

What is the FACT?

The fact is given in the CAPTION. Russians bought 25 tons in a Month. If you remove SUNDAYs – they have bought 1 ton GOLD a day. In other words they invested Rs.250 Crs per day in GOLD (assuming price of Rs.25000 for 10 grams and converting the same into 1 tons) for 25 days in a ROW.

Why they are Buying GOLD?

Looking at the Greece and Portugal like scenario – people are losing trust on BANKING System there. Banks were closed in GREECE for a week or so. Share Market is still closed in GREECE. They are about to open the same. In such a situation GOLD is the only thing, which can help you survive.

In June 2014 – we had written our most BOLD prediction that World War 3 is coming. I am seeing these kind of scenario will lead to UNREST / CHAOS in DEBT Ridden countries of the world. The billionaires in those countries will also be looking for some SAFE HEAVEN to invest their MONEY.

At the time of Portugal fall out – select few transferred their money out side Portugal before it went broke. With all the countries getting affected by DEBT – your money is not safe in other countries too. So, the billionaires in those countries will consolidate their wealth at such time and GOLD is the easiest way to consolidate the WEALTH. Due to this - I am 100% sure  - like RUSSIANS – other countries will catch up with the GOLD sooner than later.

What is our call NOW?

When I started buying at USD 1150, I have factored in the downside of 10% to 15% and I am okay with that. In fact, it is a blessing in disguise because it provides me an opportunity to buy GOLD at relatively stable prices as per my fund flow every month or quarter. In short, our call in GOLD is BUY since March 2015.

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Have a Great Week End.

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Hitesh Parikh