-- Posted Tuesday, 3 January 2012 | | Disqus
Gold and silver outperformed every commodity in 2011. This trend may or not continue this year. Silver once again was trailing behind on poor global economic fundamentals. Indian stock markets took a severe beating as foreign investors pulled away from the Indian markets.
MCX |
| 2010 CLOSE | 2011 CLOSE | CHANGE | % CHANGE |
GOLD | 20728 | 27329 | 6601 | 31.85 |
SILVER | 46217 | 51029 | 4812 | 10.41 |
COPPER | 439.5 | 406 | -33.5 | -7.62 |
CRUDE OIL | 4088 | 4296 | 208 | 5.09 |
ZINC | 108.8 | 97.5 | -11.3 | -10.39 |
LEAD | 115.65 | 105.5 | -10.15 | -8.78 |
NICKEL | 1111.8 | 975.6 | -136.2 | -12.25 |
Above prices are in Indian rupees |
COMEX FUTURES |
| 2010 CLOSE | 2011 CLOSE | CHANGE | % CHANGE |
COMEX GOLD | $1,405.90 | $1,566.80 | $160.90 | 11.44 |
COMEX SILVER | $3,051.30 | $2,791.50 | -$259.80 | -8.51 |
COMEX COPPER | $436.25 | $343.60 | -$92.65 | -21.24 |
NYMEX CRUDE OIL | $89.84 | $98.83 | $8.99 | 10.01 |
Gains in gold and silver prices in India were primarily due to a weaker rupee against the US dollar which fell 18.50% last year. The rise in gold prices suggests that there will be continued Indian investor interest in gold and silver at lower prices.
However if and when there is stability in Indian stock markets and a confidence is created there will be less volatility and a slow and steady rise as 2012 progresses. There will be mild investment outflows from gold into equities. This should happen anytime after March 2012. Once equity markets rise, the rupee will also gain against the US dollar. Gains in the rupee will prevent gold and Indian commodity prices from rising. We expect the rupee (usd/inr) to gain in the second quarter.
Silver will start its big rise once global economic fundamentals are good. Till then it will consolidate in a wider range. Copper and base metals direction in 2012 will depend on the global economy and china. Middle East risk will be the key for crude oil (apart from the global demand scenario).
We expect silver, copper and other base metals to rise from the second half of the year as European risk fears subside. US presidential elections in November 2012 should be bullish for global stock markets.
Our investment portfolio: In the first six months we prefer a 50:50 ratio between commodities and equities and in the second half of the year the ratio should be 65:35 in favor of equity markets. Among commodities one should look for a bottom in silver before June 2012 and invest for the end of the year.
Gold will rise in 2012 and there is no doubt over the same but we prefer to reduce allocation to gold in the second half of the year. One should use the 2012 dip in gold and silver to invest for a period of three to five years. The same goes for Indian equity markets.
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
-- Posted Tuesday, 3 January 2012 | Digg This Article
| Source: GoldSeek.com
