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Gold ~ Will it go some more Lower before it again goes much Higher ? ~ Check out the US $ Supply for the answer !

Gold ~ Will it go some more Lower before it again goes much Higher ?

This is a Million Dollar Question that can make you a Million Dollars ! 

I took you on  gold run from US $ 500/oz levels from 2005/6 to US $ 1900 last year just short of my second long term target of US $ 2000 ~ the first of US $ 1000 was breached in 2009

Gold is now US $ 1581 an ounce after a golden ten year run

Gold glitters in the 21st century

Gold clearly thrived as USA kept it’s US $ printing press working overtime for years to fund it’s deficits ~ Look at this revealing chart below ~ It shows the direct co-relation between the increasing supply of the US $ through new currency printing in trillions of Dollars in the last six to seven years and the increasing price of Gold

Direct Co-Relation ~Gold Price & US $ Supply

USA is clearly on a severe back foot on the Economic Front threatened with Huge Debt and Deficits and is currently in a Long Term and Painful Deleveraging Mode ~ The Road through Quantitative Easing has meant excessive supply of Funds to buy up Bonds ~ The Currency Printing Press has been working 24 hours for several years now ~ the Price of Gold has risen in direct co- relation to this increase in Money Supply

Offence is the Best Form of Defence seems to be USA’s Response and it is becoming increasingly clear that it has implemented a  multi pronged aggressive media propaganda into advanced play ~ both ,on the economic and on the political front

Check this multi pronged and well planned Pointing Fingers by USA with the use of a powerful US  Media

  •  USA President Obama openly now points fingers at India for not opening out FDI
  •  USA continues to scream publicly at China for keeping it’s Yuan deliberately undervalued ~ probably actually revelling in having to pay off a devalued dollar debt in the future when US $ begins to reverse again after it’s recent surge
  • …and an even more serious accusation that USA is actually supporting what they term as ‘Arab Spring’ and funding and arming Criminal gangs and  Rebels to destabilise Arab Regimes  or even directly involving Military or NATO Intervention in these Arab Nations ~ The Iraq Invasion ~ The Fall of Libya ~ and now Syria are all prime instances  ~ Seema Mustafa in her column in DNA today

    The Arab Spring is nothing but an eyewash – Analysis – DNA

     asserts that it is less for  ushering in Democracy in these Islamic States and more for sanitising the Arab Region for their ally, Israel       

The US $ may continue to hold and even strengthen a little more over the next few months as US President Elections come closer in November 2012,before it again begins to shows it’s inherent weakness during the painful deleveraging process and the continuing excessive printing of Currency to finance Deficits 

Gold may therefore continue to hold too or even seek a lower level to US $ 1400/oz in the short term before it resumes it’s march back up to show it’s inherent strength

Keeping an eye on 2015,stay invested in Gold ~ Buy some more on any significant fall ~ because if Nouriel Roubini’s ‘Perfect Storm’ 2013 scenario plays out,you’ll reap a bonanza in Gold even sooner ~ Roubini’s betting on a worsening Eurozone,China growth ebbing,USA Recovery weakening and Military Conflict involving Iran all climaxing into a ‘Perfect Storm’ next year in  2013       

I have been a strong advocate of Gold from 2005 and remain one even now ~  Clients and Workshop Participants in India and Overseas will support this ~ even those disbelieving Private Bank Wealth Managers who I addressed for two whole days a few years ago and told them they would double monies in Gold inside three years for their High Net Worth Clients ~ many of them since have wanted to work for and with me !

Cheers !


2 thoughts on “Gold ~ Will it go some more Lower before it again goes much Higher ? ~ Check out the US $ Supply for the answer !”

  1. Thanks Gaurav for posting this view. Gold can continue to go up but do you think Crude can out-perform Gold over next 2-3 years? Crude being industrial commodity against nonproductive gold? Also don’t you think some day US will suddenly recognize that printing presses need to be stopped and table will turn overnight? Though this may not happen soon it surely can happen in next 2-3 years.

  2. yes Jigs,I am bullish on Crude ~ in 2005/6 when it was @US $30 a barrel I had made a strong case of US $ 100 in a few years to an astonished BSE Training Class ~ The Premise of Gold reaching for records in the future is not just supply of US $ but also the belief that the US $ will weaken considerably in the struggle to overcome the Huge Debts and Deficits that are building up despite Deleveraging Efforts ~ Cheers,gaurav

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