View
226
Download
6
Tags:
Embed Size (px)
DESCRIPTION
Money CapitalHeight Research Pvt Ltd is a leading Stock Advisory Company, having a strong hold in providing most authentic and accurate Equity Tips as well as Commodity Tips. For 2 Days Free Trial, please visit our site at http://www.capitalheight.com or please call our 24/7 Customer Care Support us at +91 9993066624, 0731 - 4295 - 950 Or email us at: [email protected]
Citation preview
www.capitalheight.com
Phone- (0731)4295950
CONTENTS
Introduction
Fundamental Reasons
U.S & Europe Woes
Gold Demand to Strengthen
Gold ETF’s
The “Chindia” Effect
Inflation
Central Bank Reserves
Technical View
Moving Averages
Fibonacci Expansion Levels
Daily Pivot
Weekly Pivot
www.capitalheight.com
Phone- (0731)4295950
Introduction
Gold is a ubiquitous metal. Its uses vary from a milk man’s wedding to the crown of the
queen. The preference for gold ranges from ornamental value to increasing investment
options. The prices of Gold are witnessing an unprecedented rise in the recent past. In
2009 the price of gold registered an increase of around 15 percent. In the last three
years there has been a 70 percent increase in the price of the yellow metal.
Forecasting or predicting the price of gold is not an easy task. There is not a simple
formula or chart to consult when guessing where bullion prices will be in 2011. The
entire economy is similar to a living breathing organism with many complex parts.
Isolating any one aspect is done with the risk of being inaccurate. The price of gold is a
difficult number to determine in the overall economic outlook. Below we have stated a
few fundamental reasons that are keeping the bullish momentum in Gold and its price
forecast.
U.S and European Woes: - The ongoing economic crisis of world’s largest
economies has fueled demand of precious metals on the back of safe haven and it is
the best hedge against the prevailing inflation as well. U.S downgrade by S&P, the U.S
debt ceiling program which may have marginal effect by end of 2012, but for now, it is
clear that H2 FY11 will be worse. It is coupled with European debt woes, which is still
struggling to recover while recent move of ECB to hold interest rates for a longer period
of time has indicated a deep cut in the banking system of EU.
With this, the ongoing geo political tensions will also play their part in keeping a bullish
momentum in Gold for coming two to three quarters.
www.capitalheight.com
Phone- (0731)4295950
Gold Demand to Strengthen:- Though Overall gold demand fell 17 percent
year-on-year in the three months from April to June to 919.8 tonnes, hammered by a
sharp drop in investment demand which offset a tentative recovery in jewelry buying.
In ongoing Q3, demand appears to have started to recover with increasing concerns
about weakness of major global economies prompting investors to buy gold as safe
haven while Asian consumers are going splash out on jewelry.
In the third quarter, we are going to see strong investment numbers, because of the
European crisis, the debt downgrade in the United States and poor economic figures
coming from the United States, which have created a concern in investors' mind that we
may be heading back to another recession
GOLD ETF’s: Large institutional investors, hedge funds and pension funds are
making large allocations to gold, as are individual investors. The proliferation of gold-
focused exchange-traded funds (ETFs) bears this out.
The SPDR Gold Trust (GLD), the world’s largest physically backed ETF with over 1,120
tons of the lustrous metal, is one of the largest holders of gold bullion. Individual
investors have never had an easier avenue for owning gold.
Gold-backed exchange-traded funds (ETFs), which experienced an 82 percent plunge
in gold demand in the second quarter, have seen very large inflows in Europe and the
United States at the beginning of the third quarter.
www.capitalheight.com
Phone- (0731)4295950
The “Chindia” effect: Economic uncertainties will hit gold jewelry appetite in
western markets where consumer demand has already weakened, But jewelry buying in
India and China -- which together account for 55 percent of global jewelry demand --
remains very strong in the short and longer term as the number of wealthy people is set
to grow there. Demand for gold bars and coins has been growing in Asian markets with
concerns about inflation and a limited offer of alternative investment instruments
pushing Indian and Chinese consumers to buy these gold products.
Also, coming months we will see festive buying in India ahead of series of festivals and
their major fest, Diwali, which could support further buying in physical market.
Inflation: The present stock market panic sent stock and commodity prices including
the price of oil are more of a panic. And that launched the big debate about whether
inflation or deflation would ultimately carry the day. Keep in mind that since 2001 –
under benign price inflation of roughly 2.5% – gold has managed to rise about more
than 400%. Meanwhile, the U.S. Federal Reserve is widely expected to keep short-term
rates unchanged keeping the doors open for Inflation to hamper their economy further.
Central Banks Researves: India’s recent purchase of 200 tons of International
Monetary Fund (IMF) gold was the likely impetus that pushed gold up over the $1,200
level in December. But more important is the sea change that has seen central banks
morph from net sellers into net buyers of gold. Central banks, which have purchased
198 tonnes of gold to boost reserves in the first six months of this year, have kept
buying in the third quarter and are expected to continue this trend later in the year.
www.capitalheight.com
Phone- (0731)4295950
TECHNICAL VIEW
Moving averages
Moving Averages 20 Day 50 Day 100 Day 200 Day
Daily $1842.54 $1735.85 $1631.08 $1530.73
Weekly $1621.50 $1483.33 $1323.26 $1108.45
Fibonacci expansion levels
SCRIPT 61.8% 100.00% 138.2% 161.8% 200.0% 261.8%
Gold $746.13 $1051.75 $1357.37 $1546.18 $1851.80 $2346.23
Daily Pivot
SCRIPT R4 R3 R2 R1 P S1 S2 S3 S4
Gold $2044 $1981 $1918 $1887 $1855 $1824 $1792 $1729 $1666
Weekly Pivot
SCRIPT R4 R3 R2 R1 P S1 S2 S3 S4
Gold $2243 $2114 $1985 $1921 $1856 $1792 $1727 $1598 $1469
www.capitalheight.com
Phone- (0731)4295950
Short term view
Gold has been in overall uptrend making higher tops and higher bottoms and most
importantly in an uncharted territory in which it is impossible to seek absolute resistance
in the near term. We have drawn a resistance trend line from May 2006, which it has
recently broken and a support line from troughs of Oct 2008. Gold has been in this
uptrend channel for quite a few years of which it has given an upside breakout.
Gold has taken solid support of this trendline and made a strong support at $1720
and if Gold trades above this and gives upside breakout above $1900 then can
target our 261.8% Fibonacci expansion level of $1950 in the short term while
on the other hand if breaks the crucial support of $1720 and it long standing
trendline drawn from May 2006, then can slide back to its previous channel
and then can trade in a range of $1700-$1450.
www.capitalheight.com
Phone- (0731)4295950
Long term view
On a broader scenario, Gold is in a long term uptrend and if we apply Elliot wave theory,
it started its impulse wave “A” back in 70’s from $34.95 to $835, due to action to detach
US dollar from gold and Soviet intervention in Afghanistan led to the rally in gold to $835
in 1980, where it peaked out and then saw a sharp decline in prices to $251.70 and
ended its corrective wave B & then was in downtrend for 20 years, till 2000-2001.
From $251.70, it started impulse wave “C”, which is by character the longest and most
fierce wave, is in progress in Gold and it is currently extending itself.
We expect Wave C to be completed in coming few months at around $2300-$2320
which is 261.8% retracement level, based on wave count and Fibonacci projections.
The target price of $2300 - $2350 becomes more realistic as it is 1980’s inflation
adjusted record price which is just below $2500.
www.capitalheight.com
Phone- (0731)4295950
Disclaimer
The information and views in this report, our website & all the service we provide are believed to be reliable,
but we do not accept any responsibility (or liability) for errors of fact or opinion. Users have the right to
choose the product/s that suits them the most.
Sincere efforts have been made to present the right investment perspective. The information contained
herein is based on analysis and up on sources that we consider reliable.
This material is for personal information and based upon it & takes no responsibility
The information given herein should be treated as only factor, while making investment decision. The report
does not provide individually tailor-made investment advice. MoneyCapitalHeight Research Pvt. Ltd.
recommends that investors independently evaluate particular investments and strategies, and encourages
investors to seek the advice of a financial adviser. MoneyCapitalHeight Research Pvt. Ltd. shall not be
responsible for any transaction conducted based on the information given in this report, which is in violation
of rules and regulations of NSE and BSE.
The share price projections shown are not necessarily indicative of future price performance. The
information herein, together with all estimates and forecasts, can change without notice. Analyst or any
person related to MoneyCapitalHeight Research Pvt. Ltd. might be holding positions in the stocks
recommended. It is understood that anyone who is browsing through the site has done so at his free will and
does not read any views expressed as a recommendation for which either the site or its owners or
anyone can be held responsible for . Any surfing and reading of the information is the acceptance of this
disclaimer.
All Rights Reserved.
Investment in Commodity and equity market has its own risks.
We, however, do not vouch for the accuracy or the completeness thereof. we are not responsible for any loss
incurred whatsoever for any financial profits or loss which may arise from the recommendations above.
MoneyCapitalHeight Research Pvt. Ltd. does not purport to be an invitation or an offer to buy or sell any
financial instrument. Our Clients (Paid Or Unpaid), Any third party or anyone else have no rights to forward
or share our calls or SMS or Report or Any Information Provided by us to/with anyone which is received
directly or indirectly by them. If found so then Serious Legal Actions can be taken