You must invest in gold?

Well frankly I do not know whether it is a good time to invest in gold or a great time to get out of gold. But let us look at the obvious reasons to buy or sell.

Obvious reasons to buy:

1. The world is busy printing money so value of currencies will fall but gold will go up.

2. More uncertainty means more gold should be bought – old world wisdom

3. Gold prices will rarely fall, if at all.

4. As Indians and Chinese consumers buy gold prices will go up from here.

5. When there is political uncertainty in the world – you are better off  buying gold.

However here are 5 reasons why the market can only come down from here:

1. Everybody knows about the above 5 reasons, so it is already priced in.

2. As all the money printers are the biggest gold holders they can sell gold instead of printing notes.

3. When all mutual funds launch gold scheme and there is nothing to distinguish between schemes, the product will be at its peak. Will all mutual funds sell when money is being collected? I doubt it.

4. Do not know about the Chinese, Kerala is a net seller of gold. An average unemployed Keralite can sell gold or land to pay for bread. Land he cannot sell for Rs. 2500 or 7500…so he will sell gold.

5. All mutual funds can disturb any you must buy etf!!!

I rest my gold or sell gold, as a broker I need brokerage. Simple aint it? As a distributor i make no TRAIL commission on gold, so I create activity – buy, sell, buy sell…..and make some money!!

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5 Responses to “You must invest in gold?”

  1. Dr Mohammed Ali Khan on August 23rd, 2009 at 12:27 pm

    There is a strong propaganda from the Libertatian and Right Wing sections of the American ( also European ) opinion makers to go back to the gold standard.. If it happens.. what will be impact on gold prices?

    Ref :-

  2. You got to be joking! US will have to change its way of living to make such a big change. It is like saying Indian politicians should not mix religion with politics. Desirable but cannot happen at all.

    Gold is a lousy commodity perhaps in the midst of a bull bubble thanks to overprinting currency machines all over the world.

  3. Dr Mohammed Ali Khan on August 23rd, 2009 at 9:41 pm

    So you feel it is desirable?
    I don’t think Gold is a commodity..
    I still functions as a unit of transaction in many ways..
    And a good hedge against inflation.

  4. Dr.Anand Ramachandran on August 29th, 2009 at 11:18 am

    I do personally do agree with the view of Dr.Ali that it is good hedge against inflation .. More over i also feel that Gold is a commodity that gives a great margin of liquidity , as when wanted in any part of the world

  5. gold a hedge? surely you must be joking Dr. Anand! If you bought gold in 1980 it cost you $ 600, now it is 1030. Can anybody explain the hedge against inflation please? i am amused at the misinformation campaign

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