Category: Gold Investment

The lack of supply and increased demand

Whenever a shortage in supply has increased the price, the principle of trade is known, and therefore, we find that the lack of production in the gold and oil of the most important factors leading to an increase in their prices, the lack of production has come for many reasons, as a stopover for producing countries to increase production launch of gold or oil.

Low interest rates

Note here that the relationship is an inverse relationship, the more interest rates rose dropped the price of gold, and vice versa, as interest rates fell increased gold prices, and this is due to the fact that individuals resort to keep more money when interest it be high in order to benefit from higher interest rates, but when low interest rates will go individuals reversed a tendency to invest in gold for fear of exposure to lower their money continuously.

We have observed during the recent financial crisis that interest rates have tended towards decline significantly during the current financial crisis, has amounted to almost zero in some countries, so it was not surprising that gold prices tend to rise that we have seen during this period. And it is expected that the reversal in gold prices with the world out of recession happen and interest rates begin to rise.

The political twists and bad conditions

Previously we mentioned that high oil prices would increase the price of gold also, due to the fact that the fluctuations and political changes play an important role in the rise in oil prices due to supply shortages and weak productive capacity during the crisis, this in turn will lead to higher gold prices accordingly. Perhaps the most striking example of this is what happened to the prices at the US invasion of Iraq.

Investment funds “pot investment to collect people’s savings and investment in securities through hand with expertise in the management of the portfolio and this is what individuals can not be achieved, it is a modern reasons for the management of funds, according to the wishes of investors and the needs of the service and the degree of acceptance of risk to achieve the benefits that can not be achieved alone, benefiting the bank or the company that set up investment funds and the savers and the national economy as a whole, and is a means to finance the operations of the national economy by linking national savings capital markets in order to achieve the protection of investors are specifically found to serve a certain class of investors, particularly young savers to find a way to diversify their investments are not available unless they have a significant financial portfolio.

Classifications investment funds:

Category I: According to the components of the investment in the Fund

There are two main types of investment funds are the direct investment funds, this fund is to invest directly in the establishment of new companies or buy stakes in existing companies or restructuring losing company The second type is the investment fund is direct and does invest in the stock market the composition of investment portfolios of stocks and bonds according to the purpose of the activity, or both.

Category II: According to the policy subscription and redemption

Divided into two types

closed investment funds defined as a as investment certificates tradable on the stock market closed investment funds where they can buy or sell through trading on the stock exchange like any other financial paper .. .

They are open-ended mutual funds and investment certificates are sold directly to the investor and can not be a way to trade in the stock exchange and the investor can be waived by the response directly to the fund each time period determined by the Fund in the subscription bulletin source.

Advantages of investment funds:

1. Investment funds can manufacture in terms of its objectives of providing an opportunity for a wide range of investors to invest in these funds according to the investment objectives of each of them.

2. managed investment funds to reduce the risks faced by the investor through what you are doing to diversify the portfolio.

3. provide liquidity for investment funds where the investor can recover the value of the documents, which he bought from these funds at a time when he sees or at the end for the Fund.

4. Verify investment flexibility for the investor funds in the event where he can change its investment objective to convert its investments from a fund to another.

5. The investment funds are considered large base where a large number of investors gather and therefore can benefit from their expertise.

source : Oman Gold Rate

Gold is generally seen as a safe haven bet by investors during the times of crisis or when uncertainty surrounds the equity markets. However, equity markets around the world are making new highs driven by strong global economic data as well as strength of dollar against other currencies.

Gold has a strong negative correlation with equity markets (refer chart).

Gold is also seen as good investment when there are geopolitical tensions in some parts of the world. Gold futures hit the levels of 29000 when the Iraq and Ukraine tensions were at their peak.

But those problems are also easing out slowly, making investors move away from gold as an investment asset.

Thus, with the easing of geopolitical tensions and strong global equity markets, Investors’ primary focus is on equities, and gold is losing its sheen as an investment class.

Gold futures’ prices have dipped nearly 2000 points in the past one month, making it the worst month for gold since May. The Nifty has crossed 8000 for the first time and it is scaling new highs every day and other equities are also benefiting from this as lots of new Investors are entering the market every day.

So, investors should definitely be decreasing their holding of gold and increasing the equity content in their portfolio.

Investors should, however, not decrease their entire gold content as gold provides a very good hedge for equities and could provide support when something goes wrong in the equity markets at a global level.

Strong economic data around the world has been driving the equity markets. The US Fed has indicated that there could be quantitative easing in the near future, which could put a lot of pressure on gold prices.

The Fed may also hike interest rates early next year, which could shift the focus of investors away from gold and towards other asset classes like bonds. European Union has also been facing disinflation and could take steps to stimulate the economy which could again drive gold prices down.

Thus, fundamentals are looking very weak for gold and its value is expected to fall in the coming year. However, retail buying could provide support for gold prices at lower levels and could prevent a steep fall in gold prices. Gold futures are expected to trade in the range of Rs 25000-25500 over the next 6 months to 1 year.

source: indiatimes

The inflation has remarkably changed the lives of many. With the worsening financial system, many are rushing to invest in valuable metals like gold bullion, bars and coins.

By the important demand of gold, many are taking advantage of acquitting folks by producing massive fake coins in the market.

Right enough, many have been persecuted by people selling fake gold coins.

If you are not cautious, you may end up like one of them. In order to spot if the gold coins that are flowing in the market are fake or not, check the following tips.

Cogitate The Metal Quality

This is the simplest way to tell a fake. Fake coins can seem dull or too shimmery. To be able to tell the dissimilarity, you need to recognize first the traits of genuine coins. The fake gold coin may have a grainy appearance and texture.

Use Magnet to Convey If the Gold Coin Is Authentic

To know if the coins are authentic, use the power of magnet to your advantage. Magnets attract fake and doesn’t attract original gold coins.

Use Authentic Silver Cleaning Solution

In an authentic silver cleaner solution, immerse the gold coins. If you see that the coating alters in color and the gold coins discolor next day, then the coins are definitely fake.

Check the Slightest Detail Of The Coins

For simpler look up, make a list of the genuine coins volume and sizes. Acquire your scale adjusted by grams. If the weight is doubtful better think twice before dealing.

It is very important to check all the measurements counting the thickness, diameter and weight.

Be Acquainted With The Separate Facts Of Each Coins

Obviously every gold coin collectors are familiar with the distinct words, images, dates and markings in their coin collection.

You can suddenly spot a fake when there is a difference with the facts. Know that these facts are essential.

A minor discrepancy can mean that the coin is fake. Also know where the image must be facing in real coins.

Evaluate the Coins by Listening

Listen in wisely as the coin hits a hard surface. Equally, this type of assessment wants specialized skills of an expert.

Take reminder that gold coins will make a different strike while a coin assorted with other metals will essentially create a lackluster thump.

You would have a gold coin so you can easily put side by side in among coins.

Compare between the Prices

You can simply tell if the gold coins are fake if the marketer is not assured with what he is selling.

If he is offering you a price that is very doubtful, do not hesitate to question. You can also check online with other resellers and ask if the price of the gold coins is at standard.

Investing in gold coins is further than doubt a good solution to the deteriorating financial system. Be guaranteed to know if the gold coins if they are authentic. Better is a clever and careful consumer than a weeping buyer.

Faced world gold prices strong pressure more than a third of its value over the past year of 2013, and for the first time since the outbreak of the global financial crisis at a time when turning the direction of investors to assets more profitable, after the failure of gold to maintain its status as a safe haven for investment.

At the time that the new year will reduce the policy of quantitative easing and low levels of inflation in the United States. With hedge funds reduced bets from high gold in the new year on the back of expectations the Fed to reduce the quantitative easing policies.

Stimulus plan

Gold prices fell by about 27.4% over the past year due to pricing pre-Federal Reserve’s decision to withdraw plans to stimulate since the beginning of 2013 on the back of improved economic data next to the environment of zero interest rates and inflationary pressures on the global level in the last year in exchange for the improved performance of stock markets, high-yield , prompting investors to get out of the gold markets and enter into other markets.

Gold has achieved in the last day of trading last year, the worst annual decline since three decades while longer last year, the first decline after 12 years of ups cascade, pointing out that the price of gold has achieved the highest level in 2013 at $ 1,679.40 per ounce last January while it was lowest level at $ 1180.15 an ounce in June of the same year.

A safe haven

Gold prices are moving near the level of support at $ 1,180 an ounce, which in the case of breaking it down prices will continue to fall to low levels.

Gold prices are going in a downward trend over the medium term, which could push investors to get out of the gold markets and enter into other markets, after losing its luster as a safe haven for investors with better indicators of the U.S. economy which drives investors to come back to invest in fixed income instruments of America.

Beginning of correct

Gold failed over the past year in the rebound from the downward trend that began in October 2012 after a break of the rising channel , which lasted about 12 years and that took prices to the highest level at a historic $ 1,920.92 an ounce in September 2011 .

Last year, it may be the start toward correcting this upward trend , especially that gold will not be able to close above the price at the beginning of the year to open $ 1,674.25 an ounce after losing the factors that were behind this increase over the previous twelve years .

Gold lost about 25% of its value over the past year , after turning the trend to bearish market since April, while the improved U.S. economic data which increased speculation in the markets that the Fed would move to reduce the quantitative easing policies by the end of the year and then this led to a decline in the attractiveness of gold and was a key feature as a hedge against inflation .

3 reasons behind the decline

There are many reasons that led to lower prices for gold for the first time after 12 years of ups cascade including the environment of zero interest rates applied by the major central banks , which was supposed to support the gold markets as it supported the stock and bond markets , however, the significant improvement of economic data at the global level was one of the key factors behind reducing the attractiveness of the yellow metal as a safe haven for investment at a time of increased hopes that the global economy may be coming from out of the crisis .

Among the factors that affected the gold price data the third quarter of 2013 , which showed a rapid growth of the Chinese economy during the year , as well as for the U.S. economy , which achieved the best pace of growth since the first quarter of 2012, and in Britain accelerated growth within the top level for the past three years while the euro zone has achieved growth in the second quarter and graduated from the recession that lasted six quarters in a row. Thus , instead of heading to the expansion of the central banks in monetary policy to support growth as it preferred to maintain the status of the current monetary policy , while others alluded to the possibility of starting to reduce the quantitative easing policies in the light of improved economic performance .

European Central Bank , for example, William is heading to the expansion of the third wave of cheap loans or activation of the European bond-buying program , while the Bank of England preferred to retain the asset purchase program as is , without changing the value of 375 billion pounds . As for the Fed decided last December to begin reducing the policy of quantitative easing and gradually until it is fully completed by the end of 2014 . And began to cut about 10 billion U.S. dollars as a start to drop to 75 billion dollars.

Hint Federal withdraw quantitative easing policies in 2013 led to the survival of non- gold assets or bonds a safe haven where the process of withdrawing mitigation policies will lead to a decline in their prices dramatically . This condition is known as the « activate the risks and hazards stop » , where during the times when the risk is low risk theory activate and stop the risk that states that investors accept the high -risk investments .

This is what happened , as investors turned to the stock markets for high-yield , which had already risen to historic levels on the back of improved performance of the major economies in terms of

On the other hand the growth of corporate profits , particularly in the technology sector and the banking sector is also President of the causes of the financial crisis five years ago

« Gold On the contrary the engine head of a demand for it because of the trend of central banks to reduce the monetary policy , especially that of the U.S. Federal Reserve pumped trillions of dollars since 2008 to address the global financial crisis »

Exchange rate and commodity markets

Given the movements of the U.S. dollar , we find that there is a correlation inverse between the dollar and gold as well as goods resident in U.S. dollars , while the relationship was strong in the first half of last year when the dollar index to reach its peak in June, at 83.60 In contrast, gold prices dropped to the lowest levels in the same year, to $ 1,180.64 an ounce. And the beginning of the second half of the year seemed to weaken the relationship at a time when the price of gold has moved and the dollar within a downward trend starting from September

Oil markets have been one of the key factors that supported gold prices, but with the decline in oil prices to near the price of the year at the start of dealings levels of $ 91.77 last November although it has risen again on the levels of $ 97.00 at the end of the year. But the overall failure of the oil in the support price of gold in any form during the year.

Future Vision

Gold corrected about 38.2% on a scale Fibonacci retracement of the uptrend that lasted 12 years in a row , which started at $ 251.70 an ounce in 1999 , pointing out that gold broke the neckline of the head and shoulders in the short term target levels of $ 1180.00 an ounce.

Gold prices broke the support area on the level of corrective 23.6% on Fibonacci of the first attempt to face areas of support is very strong at the correctional level of 38.2 % , this is taking into account the role of the weak who played correctional level of 50% on the same scale corresponding to the levels of $ 1085.00 an ounce, noting that the state has a negative acceleration takes gold prices to the levels of support $ 889.00 per ounce, which corresponds to 61.8% correctional level on the Fibonacci and so in the medium term .

Gold is a precious metal, which competes in the import and To Own-rich countries that have a lot of money, and there are countries that were lucky to import gold and make it a cherished guest in their country and these countries.

Iran

Known for Iran that he always has a large share of the import of gold and Iran is the nations largest in the import of gold to enjoy it on its own territory, where the Minister of the Turkish economy, the value of Turkish exports   12.7 billion dollars in 2012 and was Iran’s share of the import of this gold is 6.5 billion dollars

China

Has revealed graph issued by the site (Zero Hedge) that the amount of gold that China imported since September 2011 and up to August 2013 amounted to 2116 metric tons, according to data compiled by this, as well as hundreds of tons of locally produced notable for the attention is the high quantity imported in the month of March at 224 tons while imports began rising relatively five months following.

United Arab Emirates

Announced the Indian Council for Export Promotion gemstone that the value of India’s exports of gems to the UAE amounted to 18.492 billion U.S. dollars last year and more than 50 percent of them had any of jewelry worth about nine billion dollars.

Turkey

Turkey is one of the world’s biggest importer of gold, reaching its imports in the month of April to 45.49 tons and is it more than doubled in the past month compared to 18.26 tonnes and imports of gold in 2012, which amounted to 120.78 tons Z throughout the year.

Iraq

Iraqi Kurdistan has imported about 34 tonnes of gold during the first seven months of 2012 were imported four thousand and 697 grams of gold attorney in January, February and March by airport Arbil in Iraq.