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January 18, 2010

Gloom, Doom or Boom?

Today's chart of the day carries from the idea in the last issue about central banks' holding of gold as part of their forex reserves. Today's chart shows the proportion of gold India's RBI has been holding over past ten years. While the holding did not change much during the period FY04 and FY09, it spiked during FY10 as the RBI bought around 200 tonnes of gold from the IMF.
via equitymaster.com

The chart's interesting not because of the spike in gold buying by the Indian Govt. But because not many knew that it was India that caused the fall of the Roman Empire's Denarius. Download the mini report on 'The History of Money' from Chris Weber

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Filed under  //   boom   gloom   gold   history   india   money  

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July 8, 2009

Hussman Funds - Going for the Gold

$/ounce of gold = $/FC x FC/ounce of gold.

Stare at that equation for a minute. Any time you see the price of gold rise, one of two things must be true. Either the foreign price of gold (FC/ounce of gold) has increased, or the value of the dollar must have declined (i.e. foreign currencies have become more expensive, and $/FC has increased).

As a result, huge and sustained moves in the price of gold require either 1) worldwide inflation, or 2) a plunging U.S. dollar. Unquestionably, rising inflation - particularly worldwide inflation, is a plus for gold prices, but the real action comes when inflation rates are rising worldwide and the dollar is under pressure.

via hussmanfunds.com

If you really want to understand a bit on gold, check out this article... it will be worth its "wait" in gold.

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Filed under  //   calculation   dollar   foreign currency   gold   investment  

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January 21, 2009

The Year that was and GOLD

(download)

This is a short summary of what has happened over the last few months from Hermitage Capital Management, and some recommendations – one which I definitely recommend – store up on GOLD.

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Filed under  //   funds   gold   private equity   reviews   wealth  

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January 2, 2009

Gold is your next bet?

Gold prices rose 4% in 2008 as nearly US$30 trillion of funds invested in equities were wiped off. The fall in interest rates also spurted the demand for the yellow metal after the Federal Reserve cut its benchmark interest rate to near zero percent. As per Bloomberg, the metal has been the second-best performer in the index of 26 commodities this year, behind cocoa. Going forward, economists expect uncertainty over performance of other asset classes to continue to attract money to gold from investors seeking to diversify their portfolios.

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Filed under  //   analysis   gold  

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