Gold above 1000$

Gold Fut shoot above $ 1000 and touched an intraday high of $1006.45. Fears of Global stock banks & economy falling investors turned assets such as gold that tend to hold their value in times of economic stress as persistent worries about failing banks and a global recession slammed equity markets in Asia, Europe and the United States.

Few days before in my last post had mentioned about the Gold fut formed "Inverted Head & Shoulder Formation' on day and was lookign strong. The view still remains intact. Major resistance $ 1028 - $ 1054. Click here to view earlier post on gold.

Gold Futures shoot above $ 1000

Gold Fut shoot above $ 1000 and touched an intraday high of $1006.45. Fears of Global stock banks & economy falling investors turned assets such as gold that tend to hold their value in times of economic stress as persistent worries about failing banks and a global recession slammed equity markets in Asia, Europe and the United States.
Few days before in my last post had mentioned about the Gold fut formed "Inverted Head & Shoulder Formation' on day and was lookign strong. The view still remains intact. Major resistance $ 1028 - $ 1054.

Gold has touched a seven month high USD 960 / oz

Gold has touched a seven month high of over USD 960/oz today. In terms of the depreciating rupee, it has depreciated over about 25% in the past one year. Internationally gold has become a safe haven in terms of the global economic environments. Therefore, demand has increased and is driving prices higher.

On the whole, Gold ETFs are definitely benefiting. So it’s a definite contradiction against Sensex, which has depreciated around 50% since the past one year.

• Gold ETFs 1-year Returns
• Reliance Gold ETF +25.8%
• Gold BeEs +24%
• UTI Gold ETF +27%
• Kotak Gold ETF +23%
• Quantum Gold ETF +18%

Gold scales new peak

Gold prices zoomed to a record high on Tuesday as global investors turned to the yellow metal on fears over global economy and inflation. A slump in the equities market across the globe also aided the rise of the precious metal, which closed at Rs 15,295 for 10 gm in Mumbai, as investors looked to gold as an alternative investment.
Even 22-carat ornament gold closed above Rs 15,000 at Rs 15,230 for 10 gm. On Tuesday, gold gained Rs 475 even as it rallied to a seven-month high in the global market to around $960 an ounce.

There were two main triggers for the gold’s rise in the global market. The first was a report from Moody’s saying banks in western Europe were exposed to the rapid economic decline in eastern Europe. The second was Russia’s announcement that gold share in its foreign exchange reserve had increased and it would continue to buy more gold.
“The economic situation is bad and markets around us are crashing. In this situation, the only option for investors is gold and silver,” said Mr Suresh Hundia, President of the Bombay Bullion Association.

Investing in Gold : Gold Chart Update

Gold Cmp 967.45 $ is looking good. In Daily Chart Gold has formed an "Inverted Head & Shoulder Formation " which suggests Gold to continue its uptrend. The immediate resistance is 988.40 $. On breaching this level expect a target of 1028$ -1054 $. On downside Gold has support 952$-921$-909$. Few days in my last post had indicated that Gold will be weak till 899$ and upon breaching it the Gold will confirm the Uptrend & make "Higher Tops & Higher Bottoms" on Weekly Chart.

Gold Making Double Top Formation

In the above Gold Chart Cmp 912.25 $ you can see the Gold has made "Double Top Formation" on Weekly chart. This indicates strong resistance of 931.45$ which was indicated in my last view. Further advisable to wait till the trend is confirmed. Short positions can be created with a stoploss above 931.45$. To view earlier post click here

Gold Chart Update

The instability of the American economy has made many investors nervous, and there's been a lot of speculation about buying gold as a safe alternative to a market that continues to tank. These days, there are many reasons for that nervous feeling.

Devaluation of The Dollar. With taxes cut, and government spending for high ticket items, such as the war in Iraq, continuing to rise, new money gets printed as fast as the presses can roll it out. The US dollar continues to lose its value compared to the Euro, the Yen and the Canadian dollar, as evidenced by the growing number of international tourists coming to the States, taking advantage of the comparatively cheap prices.

Fear of Bank Failures. The Federal Deposit Insurance Corporation (FDIC) is expecting many bank failures in the next few years, due to the imploding housing bubble throughout the country, where too many loans were made, using shaky interest rate mechanisms. The resulting credit crunch will make it harder for people to take out loans, eliminating the biggest moneymaker for these banks.

Technical View : In the above Gold Chart Cmp 904.75 $ you can see the Gold is making 'Higher Tops & Higher Bottoms' on Day chart. This indicates strength in the stock. Even though Gold looks weak, it would be advicable to wait till Gold breaks immediate major resistance of 931.45 $. It appears that the Gold will test the high of 931.45 $ in couple of days. On 12th Dec 2008.

Gold Making Higher Tops & Higher Bottoms

The instability of the American economy has made many investors nervous, and there's been a lot of speculation about buying gold as a safe alternative to a market that continues to tank. These days, there are many reasons for that nervous feeling.

Devaluation of The Dollar. With taxes cut, and government spending for high ticket items, such as the war in Iraq, continuing to rise, new money gets printed as fast as the presses can roll it out. The US dollar continues to lose its value compared to the Euro, the Yen and the Canadian dollar, as evidenced by the growing number of international tourists coming to the States, taking advantage of the comparatively cheap prices.

Fear of Bank Failures. The Federal Deposit Insurance Corporation (FDIC) is expecting many bank failures in the next few years, due to the imploding housing bubble throughout the country, where too many loans were made, using shaky interest rate mechanisms. The resulting credit crunch will make it harder for people to take out loans, eliminating the biggest moneymaker for these banks.

Technical View : In the above Gold Chart Cmp 904.75 $ you can see the Gold is making 'Higher Tops & Higher Bottoms' on Day chart. This indicates strength in the stock. Even though Gold looks weak, it would be advicable to wait till Gold breaks immediate major resistance of 931.45 $. It appears that the Gold will test the high of 931.45 $ in couple of days. On 12th Dec 2008 I had posted the weekly chart, which shows that Gold was still in downtrend.

Gold Chart Update

The instability of the American economy has made many investors nervous, and there's been a lot of speculation about buying gold as a safe alternative to a market that continues to tank. These days, there are many reasons for that nervous feeling.

Devaluation of The Dollar. With taxes cut, and government spending for high ticket items, such as the war in Iraq, continuing to rise, new money gets printed as fast as the presses can roll it out. The US dollar continues to lose its value compared to the Euro, the Yen and the Canadian dollar, as evidenced by the growing number of international tourists coming to the States, taking advantage of the comparatively cheap prices.

Fear of Bank Failures. The Federal Deposit Insurance Corporation (FDIC) is expecting many bank failures in the next few years, due to the imploding housing bubble throughout the country, where too many loans were made, using shaky interest rate mechanisms. The resulting credit crunch will make it harder for people to take out loans, eliminating the biggest moneymaker for these banks.

Technical View : In the above Gold Chart Cmp 904.75 $ you can see the Gold is making 'Higher Tops & Higher Bottoms' on Day chart. This indicates strength in the stock. Even though Gold looks weak, it would be advicable to wait till Gold breaks immediate major resistance of 931.45 $. It appears that the Gold will test the high of 931.45 $ in couple of days. On 12th Dec 2008 I had posted the weekly chart, which shows that Gold was still in downtrend. To view earlier post click here

Whats next move on Gold ?

Gold on weekly chart is still making a Lower Tops & Lower Bottoms. Also the swings are too fast & almost 76% of the main move in each swing. Due to which the Gold seems to be too volatile in near term. A Trendline joining all the tops is the resistance for Gold. Still Gold looks weak & the key reversal is will be to break a nearest top i.e. Higher Top.

Gold Making Lower Tops & Lower Bottoms

Gold on weekly chart is still making a Lower Tops & Lower Bottoms. Also the swings are too fast & almost 76% of the main move in each swing. Due to which the Gold seems to be too volatile in near term. A Trendline joining all the tops is the resistance for Gold. Still Gold looks weak & the key reversal is will be to break a nearest top i.e. Higher Top.

Should I buy physical gold or opt for funds?

THE love for gold in India is legendary. Besides bank fixed deposits (FD), it has historically been one of the most preferred ways to invest money. This is especially true of the rural areas, where even the penetration of banks is low. So, there's always been a good demand for gold in India.These factors have generated a lot of interest in gold amongst investors, worldwide:

• The volatility in the equity markets worldwide
• Concerns of the United States recession
• Inflationary pressures due to high oil, commodities and food prices
• Weakening dollar have generated a lot of interest in gold amongst the investors worldwide.

More options

Traditionally, your only option when it comes to buying gold was in the physical form. But with the launch of Gold Mutual Funds (Gold Exchange Traded Funds or ETF), you can, now, buy gold in the demat form. Ask two questions before you go shopping:
Should I invest in gold?
If yes, then which is better -- physical gold or gold ETF?

The best way to invest in gold

IT'S no secret that Indians are the largest consumers of gold. Come dhanteras and we flock to the jewellers (or banks) to buy that token gram (or few grams) of gold. This, irrespective of prices.
But the options are far more now than there were a few years back. It's no wonder then, that Alok Govil, a retired Army Colonel, wants to invest in gold this year, but differently.

An avid reader and active Internet surfer, Govil doesn’t believe in leaving his investments to chance. He has a well-diversified portfolio of stocks, mutual funds and fixed deposits.
Govil has also put money in physical gold (trinkets for his wife and daughters). Now, he wants to invest in a gold ETF.
Before taking the plunge, he wants to know:
1. If gold ETFs score over physical gold?

2. If it is better to buy gold bars and coins from a jeweller or a bank?