-- Published: Tuesday, 15 November 2016 | Print | Disqus
I am against selling gold and silver unless they fall below yesterday’s low. Silver’s pathetic performance will ensure that more and more investors invest in gold and not in silver. Gold is still a safe call over silver. Physical gold premiums rise anytime and makes up (too a certain extent) the fall in spot prices. Obama advised Trump that it will be a different ball game once Trump moves to the White House. Speculation is that Trump is trying to get special security clearance from the CIA for certain family members. All kinds of confusing news are causing volatility in the markets. Some bankers say gold will fall below $1000 next year under Trump. Others say gold will rise. Even the banking and hedge fund community is divided over the direction of gold for next year.
I agree with Buffet. All election promises are never implemented. Some are just made to win the elections. If Trump succeeds in reviving the American manufacturing sectors and reducing illegal immigrants then gold will come under further medium term bearish direction. To me the Trump’s foreign policy will dictate investment demand in gold and silver. Trump’s foreign policy with (a) UK and European Union be the key. NATO and CIA have common interest of creating more and more wars. Everyone was made to believe that Obama will bring more peace globally. But the reverse happened as he created the Islamic state, bombed innocent humans in Yemen and Syria. (b) Relations with China in the South China Sea. Gold investment demand under Trump will be dependent on Trump’s foreign policy apart from interest rate and other factors.
A bit on the Demonetization in India
The scheme is applauded by everyone. Implementation issues are there. Honest tax payers will end up paying multiple times tax on their savings. How? I have a close friends father who retired a few years ago from a top notch managerial post in a private sector corporation. He does not believe in the credit card spending (but he has a credit card). He spends mostly in cash. His savings all his life has been very high due to a very simple life style. He always keeps Rs.6 lacs to Rs.7 lacs in cash in his house as contingency fund. (all this is from his savings after paying taxes). He is worried that after the initial limit of Rs.250,000, he will once again have to pay tax and penalty on the balance Rs.350,000. There will be multiple times taxation in his case. I believe there should provisions made in the income tax act to prevent such double taxation of honest tax payers.
Another case. A friend’s mother is 55 years old. In a typical Hindu Indian family, women receive cash gifts on occasion of various festivals such as Rakhee, Karva Chauth, Diwali etc. Such money received by the Hindu women used to be saved. Women also save from the monthly household money which is given to them. This savings is termed as “Pin Money” by tax authorities. The “Pin Money” savings is after deducting all kinds of taxes. There will be millions of women who have cash much more than Rs.250,000. Once again they will have to pay tax plus penalties.
Nationalism is fine. But I just hope honesty is not brutal.
Gold and silver are not out of the woods yet. They need a daily close over $1232 and $1737 to restart the short term bullish direction.
MCX GOLD DECEMBER 2016 – previous day close Rs.29607.
(a) Key long term support is at 28986 (b) Intra day gold needs to trade over 29430 to rise to 29898 and 30208. There will be sellers only below 29430 to 29177 and 28986. (c) Gold needs to close over 29700 today to resume the bullish direction.
(prices in Indian Rupees above).
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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-- Published: Tuesday, 15 November 2016 | E-Mail | Print | Source: GoldSeek.com