Socgen Declares “The End of The Gold Era”.What is our call?
April 3, 2013
Socgen Declares “The
End of The Gold Era”.What is our call?
Greetings from
Hitesh! For a change Experts are busy giving their views on GOLD nowadays. Research
guys from Societe General have come out with 27 pages report on Gold. Let us
see what it says.
Call Of Societe General On
Gold:-
The analysts at Societe
Generale have just published a massive 27-page special report titled: “The End
Of The Gold Era.”
”Our expectations for rising
interest rates, driven in part by a positive view of the US economy with an
associated improvement in the dollar, could be the perfect storm to start a
longer-term bear market,” ( in Gold)
“Our expectations for rising
interest rates, driven in part by a positive view of the US economy with an
associated improvement in the dollar, could be the perfect storm to start a
longer-term bear market,”
SocGen notes two statistics:-
1. “Since the beginning
of January of this year, gold ETFs have dumped roughly 140 tonnes of gold and
February witnessed the largest monthly outflow on record.”
2. “The overall investor
outright short in late February by hedge funds was at its highest in 12.5
years.”
They further add……
“But inflation has so far
stayed low (US inflation has been trending lower since late 2011) and now we
are beginning to see:
1) The economic conditions
that would justify an end to the Fed’s QE;
2) Fiscal stabilisation that
has passed its inflection point; and
3) A US dollar that has begun
trending higher. It seems unlikely that investors would want to add much to
their long gold positions in this context.”
“Our base case is that the
Fed’s balance sheet will continue to expand at $85bn/month through September,
at which point purchases may be tapered modestly to $65bn/month until being
fully terminated at the end of the year.”
What we had Said on 28th
June 2012 ?
Long before all these experts could tell you, on 28th
June 2012, we had written our most read email “Should You Invest in Gold and
Silver Now?” In that
we had categorically said……
“With 30% down side and 30% gain…..Risk
reward ratio in Gold is not favorable. However, in silver 30% down side with
60-70% gain…risk reward ratio looks favorable.”
What happened after we said the above :-
Gold has come down, while Silver had moved up from Rs.52000
per kg to Rs.64000 per kg and its again come down to 52000.
We were proven 100% Correct way ahead of the
market experts.
What is our call now?
1. If USD moves up as expected by all experts, Rupee will also go down……so the
fall in Gold prices in India may not be as much as it is in Dollar terms.
2. In order to manage the CAD, Indian Govt has already hiked Import duty in last
year only. This has already increased the cost of import in India. High import cost
will also take care of fall as far as Indian market’s are concerned.
3. For international market, the assumption of Termination of QE by FED by the
year end 2013, looks impossible. So, we do not see fall up to USD 1375, as
these guys are talking about.
4. We recommend investments only and
only if we can make good money during our targeted period……our goal is not to
go Right or Wrong.
5. Looking at the events till July 2013, we see cherry picking opportunities
in Equities rather than in Gold.
What Next?
Looking at our
track record of being way ahead of the market experts, I leave it up to you to
follow me or not? Our experiences tell us that those who follow us, always
bless us.
You can follow
my @hiteshmparikh on twitter.
If you need personalized
guidance, do write to us.
Live With Passion, Invest
with Passion.
Hitesh Parikh.
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