-- Published: Wednesday, 22 July 2015 | Print | Disqus
In India there is huge speculation that gold prices will fall by another ten percent to fifteen percent (from current prices). As a result retail buyers have not flocked to buy gold. Gold has to show clear signs of trend reversal to attract buyers in India and Asia. There is massive speculation that Indian gold prices will fall below Rs.23000 per ten grams and that silver prices will fall to Rs.29000 per kilogram. It is this speculation that did not result in massive Indian demand.
Two years before, Indians used to buy physical gold and/or gold jewelry if they anticipated an auspicious celebration in the family like marriage, birth of child etc. Now they are buying only just before the celebration and not presumptive buying. The sole reason is the continuous fall in prices.
How I advise
My way of advising for precious metals is (a) Buy physical metals if one wants to invest for a period of one year or more. For US/Canada clients invest in far dated option markets. (b) Future market, I have always been an advocate of trading for intraday to a week. In futures trading, book the profit and get out and reduce greed. (c) I have always been against investing in exchange traded funds (ETF) and will continue to remain the same. But I am never against investing in metal mining stocks. I always keep in mind that there will be a minimum fifteen percent deviation from long term support/resistances due to algorithmic trading.
A bit on silver and aluminum
Among the future metals, I prefer silver and aluminum stocks. These two metals have been ripped apart. Silver and aluminum mining companies should now see a lot of merger and acquisitions space. Fundamentally also, I foresee a lot demand for these metals. A long term bottom for demand should be formed before March of next year. US/Canada traders should buy end 2016 dated call options for silver and Aluminum.
We all know the uses of silver. Aluminum has replaced copper in many of the gadgets sold in India like cooling equipment among other uses. Aluminum to copper substitution in India is catching up with a great space. Aluminum will also see more use in future metal alloys being developed. The future of metal demand will be in the form of alloys. Gone will be the days when metals in pure form will be used in the gadgets/equipment. Metal alloys are the future. Silver and Aluminum score an edge over other traditional metals and traditional alloys.
Gold for retirement purpose
My late mother was an excellent fund manager. According to her, the real purpose of physical gold investment is for old age and retirement. In Indian culture, parents sacrifice all their life to meet the needs of children. There are many instances when parents when they grow old and are unable to earn are discarded/neglected by the children. In these times, physical gold can be sold, the money invested in bank fixed deposit to meet old age needs. (I personally believe that women are better fund managers than men.)
Momentum is bearish for all commodities. US economic data vacuum gets over today. Gold can fall to $1073 and $1044 as long as it trades below $1121. Silver can fall to $1420 and $1370 as long as it trades below $1515.
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
Disclosure: Insignia consultants or it employees do not have any trading positions on the trading strategies mentioned above. Our clients do have positions on the trading strategies mentioned in the above report.
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NOTES TO THE ABOVE REPORT
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UK session starts around 1:30 pm Indian Standard Time (+5:30 GMT) -- after the release of LME daily inventories
US session starts at 6pm pm Indian Standard Time (+5:30 GMT)
PLEASE NOTE: HOLDS MEANS HOLDS ON DAILY CLOSING BASIS
PLEASE USE APPROPRIATE STOP LOSSES ON INTRA DAY TRADES TO LIMIT LOSSES.
APPROPRIATE STOP LOSSES PER LOT IN US DOLLARS ON THE TRADING CALLS GIVEN IN THIS REPORT
COMEX GOLD – $15-$17
COMEX SILVER: $25-$30
COMEX COPPER: $3
NYMEX CRUDE OIL: $0.60
SPOT SILVER: $0.25
SPOT GOLD: $15-$17
THE TIME GIVEN IN THE REPORT IS THE TIME OF COMPLETION OF REPORT
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-- Published: Wednesday, 22 July 2015 | E-Mail | Print | Source: GoldSeek.com