Gold the most loved asset class in India...at turning point now

1. Everybody
Loves Gold?
April 15 2013
Deepak Singh
www.stateofthemarket.net

2. Opening Remarks
Myth: You can never lose money on Gold
Belief:
Indian households have
Gold has been such a bought some US$90 bn of
rewarding investment in gold in the last three
last 10 years that years…..Goldman Sachs
everyone holds this
belief
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3. Here comes the shock
Dramatic Decline in Gold prices in 2013 from 1700 to now 1400
Gold now
at 1410
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4. Gold: The
Bearish Era
Between 1980 and 2001
Forgotten Period
Gold lost 60% of value
during this period

5. Gold Bearish Era: 1980-2001
Gold peaked around 700-780 in 1980-1981 and then bottomed around 250-
260 by 2000…..20 long years
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6. Gold Super Bearish Phase: 1996-2001
It was the best
economic expansion
period in US
Gold broke down below
200 week ma and
stayed below it for 5
years
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7. Gold: At turning point in 2001-2002?
Dramatic Breakout
above 200 week ma
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8. Gold never looked back since then
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9. But now the Trend Broken
Gold Breaks down
below 200 week ma
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10. What does it mean?
Gold is set to become trendless
Logic:
When any asset becomes
trendless…it’s less
rewarding to hold as an
investment asset
Gold is no more safe haven. It's is going to be
very volatile on a day-to-day basis, but there
will be no trend on longer-term basis….George
Soros
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11. What does this mean for India?
Can we go back to normal period?
The craze for Gold shot up dramatically in last 3-4 years
Will demand reduce to
pre-crazy levels to sub
1% of GDP from current
2.8% of GDP?
The answer is it
depends how Gold
performs from here on.
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12. What if demand for Gold reduces?
What difference will it make for India?
As per some calculation:
It will free up $200 bn
worth of cash flows over
next 3-4 years to other
productive sectors of the
economy.
Will it
happen
?
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13. Thank You
• Disclaimer - The state of the market presentation is Deepak's
perspective on the market. The presentation is purely for educational
purpose. Nothing contained herein is a solicitation to trade or a
recommendation of a specific trade. By reading this presentation you
agree to make no trade relying in whole or in part on the comments
of the writers
• Chartsource: Chartalert.com
• You can send me feedback at 2deepaksingh@gmail.com
• Twitter handle: smarket
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