With reference to my previous mail a Global sell off in equities is looking in eminent. The question is only related to the timing. The world gdp has seen its best time in last five years growing at 5% yoy, but is expected to slow down form current year. Fed is cutting interest rates and this resulting into weakness in the value of dollars vis a vis other currencies. Global inflation is rising on the back of record Crude price and Food price. To put things into perspective Wheat prices have risen 70% in last year. China is facing a all time high inflation due to 55% increase in pork prices. India is set to become a net importer of rice form the largest exporter. Historically gold has served as the best store for value to fight inflation. It will also act as a protective asset to fight global sell off in equities markets. If we look at the chart gold has given a tremendously bullish breakout of a round bottom pattern. With one year timeframe in mind the next target for gold is 12500 and 13500. This will result into a cool 25% return on one of the safest investment. I will advise investor to shift at least a part of their investment into gold and other precious metals to wither the possible sell off in the global equity markets.
No comments:
Post a Comment