WHY INVEST IN COMMODITIES/HARD ASSETS AND NOT PAPER ASSETS?
The power of paper assets is dwindling. Globally there are more billionaires than history has every seen. The power of money falling with passing of each day. Nothing official about it! One has use to the concept of Time Value of Money before making investment decision. In lay man’s terms one needs to invest in such a way that he is able to maintain his future standard of living.
I am a firm believer that commodities are the future of investments. My bias towards commodities over paper assets will continue. The basis of judging any investments is the returns they generate. It is there in the table below.
INVESTMENT RETURNS AS ON 1ST JULY -- 20TH JULY, 2007
HARD ASSETS
PAPER ASSETS
20TH JULY, 2007
JUNE, 2007 CLOSE
% GAIN/LOSS
20TH JULY, 2007
JUNE, 2007 CLOSE
% GAIN/LOSS
SPOT GOLD
682.55
648.9
5.19%
EQUITY INDICIES
SPOT SILVER
13.26
12.44
6.59%
DOW JONES
13851.08
13408.62
3.30%
DOLLAR INDEX
80.15
82.1
-2.38%
SENSEX
15553.89
14650.51
6.17%
FTSE
6585.2
6607.9
-0.34%
GOLD AUGUST
683.9
650.4
5.15%
DAX
7874.85
8007.32
1.65%
SILVER SEPTEMBER
1339
1237.9
8.17%
CAC
6054.93
5957.16
1.64%
COPPER SEPTEMBER
372.5
342.75
8.68%
HANGSENG
23291.9
21772.73
3.98%
CRUDE OIL - NYMEX
75.7
69.57
8.81%
PLATINUM - NYMEX
1338.5
1241.6
7.78%
LONDON METAL EXCHANGE
FOREIGN EXCHANGE MARKETS
COPPER 3 MONTH
8135
7560
7.65%
EURO/USD
1.3826
1.3446
2.83%
NICKEL – 3 MONTH
34900
36100
-3.32%
GBP/USD
2.0558
2.0028
2.65%
ZINC - 3 MONTH
3712.5
3350
10.82%
USD/JPY
121.25
123.15
1.54%
LEAD - 3 MONTH
3475
2658
30.74%
USD/CHF
1.2006
1.2309
2.46%
TIN- 3 MONTH
15450
13950
10.75%
AUD/USD
0.8799
0.8458
4.03%
ALUMINUM - MONTH
2195
2235
-1.79%
USD/CAD
1.0487
1.059
0.97%
The debate between paper assets and hard assets will never stop. Even hard assets can become paper assets. Trading in gold future is only paper. Just like any other investment timing of entry is important. I have not considered agri commodities such as corn, soybean whicj may have given better returns than paper.
(This is an excerpt from the weekly report )
SpotGold has edged past $680 and is nearing $700.0. Retail Investors as well as fund managers now suddenly think gold is worth an investment. Investors are now waiting to see if gold breaks $700.0. If Gold breaks $700.00, it could attract more short-term hot money and could easily $752.0. I am cautiously optimistic on gold and silver bullishness as it more of a US dollar decline story.
GOLD -- AUGUST FUTURE
A consolidated break of $685.60 will result in $691.10 and $699. On the lower side $678.10 is the initial support with $674.40 as the key support
Happy Profitable Trading
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