{"id":60129,"date":"2012-06-21T10:05:05","date_gmt":"2012-06-21T00:05:05","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2012\/06\/21\/gold-the-bet-each-way\/"},"modified":"2012-06-21T10:05:05","modified_gmt":"2012-06-21T00:05:05","slug":"gold-the-bet-each-way","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2012\/06\/21\/gold-the-bet-each-way\/","title":{"rendered":"Gold: The Bet Each Way"},"content":{"rendered":"
\n\tBy Jonathan Barratt<\/span><\/div>\n
\n\t <\/div>\n
\n\tAs uncertainty over Spain engulfs the market, investors are seeing value back in the gold market. The ETF<\/span> build over the last week has seen 6.1 metric tons added to the portfolio, which makes the total holding 2399.72 tons — levels not seen since March.  The market remains well supported from all sides and as such we can anticipate more gains for the metal. It is interesting to note that the market looks to be tied to the fact that the lack of stimulus translates to gold going down, so it is reasonable to assume that increased stimulus should see gold prices higher. This seems to be occurring as we test the old highs of US1635<\/span>, so what are the main drivers for the investors to fly back to the metal? Essentially, we see two main reasons. Firstly, the potential for a liquidity freeze in Europe. Should the sovereign debt contagion escalate towards Spain and Italy, this represents gold appeal as a safe haven status. Secondly, demand from investors who see gold as a hedge against inflation or deflation depending on your school of thought.<\/p>\n
\n

\n\t\t\tCertain types of assets perform better under certain conditions. It is commonly recognized that hard assets and commodities generally perform better in periods of inflation. Bonds and Cash tend to have a greater performance in deflationary periods. Gold has being interesting and as noted in previous Bulletins, gold’s trading behavior has been erratic. Tending to trend counter to the other traditional markets, gold has been up when the USD has been firm,  and this is counter-intuitive. However, gold is a unique monetary metal and historically has performed well in both an inflationary and deflationary period<\/strong>. As recent rhetoric is trying to compare the current situation to the 1930s<\/span> it is interesting to see that gold out performed virtually all asset classes during the periods of deflation in 1929 and 1940 and also during times a great inflationary concerns in 1968 and 1980. <\/p>\n

\n\t\t\tAs we are living through a massive amount of deleveraging<\/span> we find ourselves sifting through the daily economic numbers trying to find some balance. On the one hand you have the global economy stalling, companies going bankrupt and countries defaulting: highly deflationary. Then on the other hand we have central banks and governments looking to prime economies through low monetary policy and forms of quantitative easing in order to stimulate growth: highly inflationary.  Whichever way you look at it history has told us that gold has performed at either end of the spectrum<\/strong>.  So, as we head into another round of bailouts in Europe, potential extension to “twist” in the US and dovish<\/span> action continuing in China, the effects whether inflationary or deflationary will benefit the metal.<\/p>\n

\n\t\t\tWe took some profit on our most recent position just ahead of the Greek general election. We continue to hold onto our long positions and will be tempted to add on a break of US1640.We have had a couple of goes at buying the break so we want to be sure this time.<\/p>\n<\/p><\/div>\n

\n\t\tChart point:<\/u><\/strong><\/p>\n

\n\t\tGold looks to be having a test to the topside. We expect US1635<\/span> to break soon and then a test to US1665<\/span>. We need to see a break above US1640<\/span>  in order to see a test to a new and higher range.  Momentum indicators do worry us at the moment., and we will monitor these closely.<\/p>\n

\n\t\t\"\"<\/p>\n<\/div>\n

\n\t <\/div>\n
\n\tProduced by Jonathan Barratt<\/span> direct from the trading desks of Commodity Broking<\/span> Services, Barratt's<\/span> Bulletin provides expert analysis of commodity markets, global indices and foreign exchange movements. Click here <\/a>to take a no obligation 21-day trial to Barratt's<\/span> or to learn more visit www.barrattsbulletin.com<\/a>. Content included in this article is not by association necessarily the view of FNArena<\/span> (see our disclaimer).<\/em><\/div>\n

\n\t\"\"<\/p>\n

\n\tThis report is not, and should not be construed as, an offer to buy or sell, or as a solicitation of an offer to buy or sell, products, securities or investments. This report does not, and should not be construed as acting to, sponsor, advocate, endorse or promote products or any other products, securities or investments. This report does not purport to make any recommendations or provide any investment or other advice with respect to the purchase, sale or other disposition of products, securities or investments, including, without limitation, any advice to the effect that any related transaction is appropriate for any investment objective or financial situation of a prospective investor. A decision to invest in securities or investments should not be made in reliance on any of the statements in this report. Before making any investment decision, prospective investors should seek advice from their financial advisers, take into account their individual financial needs and circumstances and carefully consider the risks associated with such investment decision.<\/i><\/p>\n

\t <\/p>\n","protected":false},"excerpt":{"rendered":"

Jonathan Barratt of Barratt’s Bulletin explains why he is buying gold.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[22],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/60129"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=60129"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/60129\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=60129"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=60129"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=60129"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}