If the charts are good indicator of price movements then gold as precious commodity has already topped out at $ 1900 in August. Last month the surprise
rally in US Dollar has unsettled the gold rally. The parabolic' trend in gold
has been broken. Currently gold is trading around USD 1650 and it has already
formed another double at 1650 levels.
Gold's
breakout above $1,000 fuelled the rally in 2009 and ever since it has been
moving higher and higher. After two years of stupendous rally gold is showing
shown of exhaustion and also giving signs of a breakdown
Money
Minister believes the time has come when all asset classes specially
commodities need to cool off. Equities have shown enough weakness to break the
commodities but the excess money supply has saved the commodities from a sharp
fall. No bull market can begin with commodities going back to depressed levels.
Investors
should focus on good quality stocks which would bring them good returns in the
long run. For short term there are signs of a slow-down which the Indian stock
market has not reflected in prices yet.
Unless
there is a sharp sell-off in Indian stocks it is futile to put your money to
work in Indian equities. When the whole world is available at a discount it doesn’t
make sense to FIIs to invest in Indian stocks. They have not sold their stakes
in Indian equities and already suffering severe losses in India.
