-- Posted Wednesday, 27 July 2011 | | Disqus
Possible Scenarios on US debt issue and global financial situation after US debt rating downgrade.
1) There is a compromise: This is the most likely scenario which can result in gold rising between $1667 and $1725 and thereafter falling to $1546. Silver can rise to $46.00 before the next leg lower to $37.40 and $32.60.
2) There is a deadlock: Gold will overshoot to $1753 and $1884 in August and then fall to $1459 as and when there is a deal. Silver can rise to $52.54 and $57.70 and then fall to $37.40 and $29.11
3) Rating downgrade: This has already been factored in by the markets. But it will increase the pace of rise of gold, silver and other safe havens. The chances of gold rising to $2025 and $2226 in 2012 will be higher. Silver can rise to $81.54 and $100.00
4) US defaults: This is the least likely scenario but can result in big rise to $2000+ in short term (before end 2011).
Base metals and energies will be volatile. They are rising on expectations that higher demand in emerging markets will more than make up for lower demand in developed nations. I am a contrarian and expect the rise in base metals and energies to be short lived, may be another two months to three months before a medium term bear phase arises. However I do not expect this years low’s to be tested unless there is a big crash in global stock markets.
I am bearish in all commodities in 2012 as it is the US election year. I expect the US dollar to gain, commodities to crash (except crude oil) and global stock markets to zoom. Medium term investors should rise the next nine months rise in gold and silver to exit their investments and then re enter on dips (below their 2011 entry prices).
TODAYS VIEW
Spot Gold: Gold targets $1631 and $1667 as long as it trades over $1610.
Spot Silver: Silver targets $43.15 as long as long as it trades over $39.50
Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. Prepared By Chintan Karnani. Website www.insigniaconsultants.in
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-- Posted Wednesday, 27 July 2011 | Digg This Article
| Source: GoldSeek.com
