Jun 032011
 

2011-11 of 2011-06-03 (3rd June, 2011)            PDF Download

In financial markets, the people are never afraid of heights, but always worried of lows. Almost all hyper activities are taking place at the height of the market, which is determined by fast and hectic rising of the almost all equities.

In Goonda Raj, the bad news pervade from one gang to another easily. The gang leader knows in matter of days how the other gangster made so much of money in so little time. They adopt same methods to succeed, and they often do.

Greed and Fear are inseparable parts of any market. Money makes everyone corrupt. Almost everyone wants to become a millionaire or billionaire in matter of days. When the bureaucrats and Ministers see the businessmen making money so easily, they come in like “mafias” and start seeking their cuts, fees, haftas (installments) or whatever christen names you may want to assign to such activities.

When the market has risen from one peak to another in rapid succession, a time comes when it begins to either crash or climb down slowly, surely and steadily. There is no more upside, so the best thing that can happen at the peak is to come down due to its sheer gravity.

So it applies to corruption as well. Scam and Scandals begin to emerge when the market is jumping from one peak to another. The ignominious methods adopted by one minister becomes example to pursue by another minister. When one is caught, the entire range of gang operators come within the net.

Media like vultures pounce on such stories and sell their newspaper or magazines at maximum rate by publishing juicy stories. They call it “investigative journalism”.

No one wants to become Lord Rama, a higher rated moral God with “ek patni vrat” (believer in only one wife). However, everyone wants to become Lord Krishna who was darling of many girlfriends or dasis or sakhis (Companions). Similarly, in financial market everyone wants to become Warren Buffett, but they do not adopt his strategy. They worship Madoff, Stanford, Harshad Mehta, Ketan Parekh etc etc. to become instant billionaire like instant coffee.

Of late lot of money has flowed into South India. Initially, lot of Keralites went to Gulf and became richer. They sent lot of money home in their home state, so the prosperity flowed there. However, they were low level workers who earned by hard physical work. They could not engage themselves into corruption. South Indians in north of Kerala were good mathematicians for a long time. They got hold of Software or computer technology. This was instant hit. So Software exports generated billions of dollars or thousands of crores in South India. Hyderabad, Bangalore and Chennai became the focal point of interest.

Such flow of enormous money attracted crooks and scoundrels in the industry and scams and scandals started erupting like volcano in government circle. While License Raj has ended long time ago, the government officials and ministers started reformed “Spectrum Raj” to capitalize on telecom revolution.

In state of Maharashtra, a new Raj called “TDR” started which means Transfer of Development Rights in real estate business. Here the official or minister allows higher FSI (Floor Space Index) against the rule by permitting the developer to transfer his right in one development to another development obviously for a hidden fee. Like Mafias, the ministers and officials at the top started charging fees to the developers and builders. In short, paper derivatives like operations started in “Spectrum Raj” and “TDR Raj”. Everything was up for sale, including IPL.

The scams and Scandals follow same pattern of stock market. When they come out with increasing frequency, they denote the first sign of “cleansing up” . The scams and scandals have no where to go up now, but only down. It is a self healing process.

A few years or decades back, Bihar, Uttar Pradesh, Haryana and Madhya pradesh were considered the most corrupt places in India. Our famous Lalu Prasad Yadav and his bibi Rabdi Devi became the household name. Their fodder fraud of Rs 700 crores look minuscule by today’s standard. In fact, Lalu compensated the country by turning Indian Railways into highly profitable public enterprise earning thousands of crores in revenue and made it a shining example. Phoolan Devi was forgotten and replaced by Maa Rabdi Devi his wife. They are no longer counted because after many scandals in Bihar and Uttar Pradesh, a correction set in and now they are nearly out.

The slack was taken over by the South India where the prosperity flowed due to rise in software exports that brought in thousands of crores of money.

A honey bee goes where the flower blossoms. The honey bees in this case were corrupt politicians and their bureaucrat secretaries. Flower pots or money were in South India. Hyderabad, Bangalore, and Chennai were the places where the crooks and criminals arrived and mushroomed. Andhra Pradesh fired the first salvo when Rajus and Reddys took over the reins.

Satyam Computer’s Chairman B Ramalinga Raju became the first billion dollar fraudster of India. If Guinne Book of Records recognizes the corruption as outstanding achievment, Raju of Satyam will enter the roster of “Fame of Records”. Once tamed Andhra Pradeshi became famed “fraudsters”. 3R – that is – Rajus, Reddys and Rajas started as roosters. GTB or Global Trust Bank where thousands of crores of frauds took place also originated from Andhra Pradesh and RBI’s Reddy took the reins indirectly behind the curtains.

When the storm or tornado arrives, it changes the directions by turning a few degrees all of a sudden. The corruption started traveling from Andhra Pradesh to Karnataka (Bangalore) and to Chennai where Maharani Jay Lalita ruled over the state with thousands of saris and sandals in her closet.

Now that we know the natural process of creation of scams and scandals and their self destructions, let us see whether they help us in making good investment decisions. The dilemma facing the innocent nationalistic investor is whether he should sell and get out of the market or use the correction as outstanding buying opportunities?

Our experience opts for latter – that is – outstanding buying opportunities to buy the tainted yet high growth and potential stocks. The stocks are some of the simplest, finest and efficient financial instruments. They are extremely volatile because very few understand them. The stocks make money when they are bought at lowest and sold at the highest. However, in order to buy high end growth stocks, we need the help from fraudsters, scam artists and scandals at the top. They cause the stock prices to crash to the lowest to afford the intelligent and smart investors extra ordinary opportunities. Otherwise, how could one buy the stock at the cheapest?

Look at the Satyam which was taken over by Mahindra group to rebrand it as “Mahindra Satyam”. In spite of accounting fraud, the company was in one of the best health by all counts. Debt free large balance sheet, huge cash chest of Rs 1600 crores, high end growth, acceptability by high end customers such as Pharma industry leaders, well trained and qualified software engineers, erstwhile good reputation in its real field, sufficient margin and rising too, and competent management.

Almost all the bad things that were to happen to Satyam had happened and the company has written off all past losses of settlement of all law suits. It starts with the clean slate now, and the stock which we recommended strongly at near 60s has risen to Rs 89 today, a gain of 50% in just under 8 months. We have set the target of Rs 160 in less than 10 months or gain of about Rs 100 or 170% .

Political events, as different from financial event, provide the high quality opportunities. A stock makes money for the investors if the underlying company makes profits consistently which is a financial event or cause. The stock price therefore goes up. However, a non financial event such as scams or scandals involving promoters or their blood relations provide the outstanding opportunities to the real gem investors.

Such scams or scandals give them “god send opportunities”. They understand the risk and reward and go for it when the scandal dies down or getting reported on inside pages of financial newspapers instead of on front page.

A case to the point is SUN TV and SPICEJET which is controlled by Kalanidhi Maran. His brother Dayanidhi Maran, a former Telecom minister, is being investigated for his role in showing favors in 2G telecom licensing, a spectrum matter. The stock of SUN TV lost 27% in one day, and Spicejet by 17% which is holding most prospect amongst the listed airline. These companies were in different industries and have no vested interest in telco licenses. Their prices crashed due to poor sentiments generated by the main promoter’s family blood relationship.

A question arises – when to buy such scrips? The answer differs from exchange to exchange. In India, Bombay Stock Exchange sets the circuit limit which varies from 5% to 20%. Some stocks do not have any circuit rule attached. When the stock falls to lower circuit, it means that buyers refrained from buying. It is possible that the stock may go to lower circuit again on next day. It is also possible that the stock may have hangover from the scandal for a few months. However, we follow the following strategy not to miss the lower prices.

  • See the intensity of the bad news and see whether the stock trades near the lowest circuit all through the day on heavy volume.
  • Start buying from third day if the intensity of news is very high
  • If the company or its promoters were not involved in seemingly bad news, ignore the news and start buying on 1-2-3 basis as under:
    1. Buy small to test the water. Say you bought 1000 shares at CMP or Current Market Price
    2. If the publicity of news is very bad, buy on alternate days. That is, after buying 1000 on first day, leave second day and buy more on third day. Say you bought 2000 shares now.
    3. Leave again for one more day and on fifth day from the news, buy small portion, that is, you buy 1000 more if the price is lower than previous purchases.
    4. Then stop. Now allow the stock prices to recover. If you have enough stock, ignore the urge to add more.
    5. If the stock recovers strongly, start selling from last purchase. Say your last purchase was 1000 shares, so begin to sell it.
    6. Sell more (say 2000 shares you bought under Stage 2 above) if the stock continues to surge. Here again sell on alternate days or if the stock trades at upper circuit or up by 15%
    7. Allow one more day to pass, and then sell the last lot under Stage 1 (1000 shares)
    8. Do not worry by selling if the stock goes higher. You made your money. If the stock goes higher, you already have old stock which was averaged down. Sell only later as per your convictions.

Allied Digital Services Ltd was hammered down due to Income Tax Raids alleging tax evasion. Good part of interpretation was that the company was making good money which was the reason to save taxes. However, the news here is bad because the company’s management is directly involved. Not so in SUN TV and Spicejet.

Buying and Selling stocks is a imperfect science. It is at the most an Art. Use your common sense, and listen to only yourself. Do not be guided by media news analysis except to know the bare facts. Trust the company’s news release as provided to NSE or BSE under Corporate announcements. Do not act on impulse and sit in quiet corner to think over whatever happened and what could be the reasonable truth. This is the best way to deal with the stock price crash of any substantive stock.

 

Kalidas (Anil Selarka)

June 3, 2011

 

Dec 022009
 

Title-Gold 6400
Ref: 09-035A of 1st December, 2009

Gold 6400 Stop Press
Are you reading it correctly? Yes, you are. Am I out of my mind? No, I am not.

Gold prices are on upswing. They are going up at the moment slowly due to rising loss of confidence of the Investors in paper currencies and also people at large. Gold is going up not because of hedge against inflation – no one consciously buy this metal with inflation in mind. Have you ever gone to a jeweler’s or gold shop to buy the gold as hedge against inflation? Definitely not.

The analysts and media who have been touting rise in gold as investor’s intention to hedge against inflation must get their head and speech examined. They have been spreading LIE at the instance of the officials of respective governments. With the loss of confidence resulting in steep decline of US dollar, the US administration has been reiterating its oft repeated stance of strong dollar policy; and when the world is not listening to buy the bankrupt dollar, they have been using media and analysts to tell the world NOT to buy gold, adding that gold market is in bubble which is going to burst one day.

Anything will burst one day.  Everyone will die one day. Does it mean that we should leave our desire to live and enjoy our life? It is nature’s cycle that what is borne today will die one day; and what is falling or rising one day will rise and fall one day. It is the eternal truth. We do not have to go to the Harvard or Wharton to learn that. This is the parental heritage.

Gold 6400 Truth Alone WinsYes, Gold and Silver have been rising due to investor’s preference to get away from paper assets to something real. They no longer treat Real Estate as really a Real wealth! This is why they are turning to Gold. Gold is GOD, Gold is Truth, and in India there is official state Sanskrit symbol “Satya Mev Jayte” that means “Truth Alone Wins”.

This is the reason that even an illiterate Indian is buying gold all the time. He is not illiterate, today’s Bankers, Investment Bankers, Insurers, Central Bankers, Finance Ministers, Governors are.  How do you measure the actions of all Central Bankers, including that of George Brown, the Prime Minister of UK who was the Chancellor of HM Treasury, sold Gold at the bottom of the cycle – $ 260 to $320? Almost all Central Banks sold over 3000 tons of gold at the rock bottom prices during last 15 years.

Is there any demand –supply imbalance that pushes up the gold? No. The demand-supply rule operates in normal times, not in emergency or 911 call.  And why should Gold go to US$ 6400 and Silver to $ 80 as projected by this Author? Why?

What the World Doesn’t Know

..Is the hidden the fact that “United States has lost almost all of its Gold during its covert practice for over 20 years”.  YES, the gold may be there physically at Fort Knox or HSBC Bullion Vault in USA. But that is NOT enough. Who owns the gold is more important than who keeps the gold. It is like your goods are in a warehouse or bank locker.  The warehouse-keeper or banker can not claim Title to or Ownership of those goods. These goods are kept with him in Trust.

GIF Animation

The FED and Treasury appear to have been concealing lending of gold to hedge funds by camouflaging transactions through various central banks. When those Central Banks lend to these hedge funds to short the gold, they appear to claim the gold from Fed and Treasury who earmark the gold in its balance sheets.  In other words, the earmarked gold shown in Fed / Treasury balance sheets is in fact owned by foreign Central Bankers and is no longer owned by the United States. If the shorted gold does not return to Fed/Treasury, they will be obliged to show it as “sale” one day. That day of reckoning will come when the Foreign Central Banks start demanding the gold physically.

According to my own research almost 6100 tons of gold earmarked in the Fed/Treasury balance sheets are non-returnable. The hedge funds who shorted it at prices $260 to $360 can not buy back at today’s prices. If they can not return, their deposits will be at the most forfeited. In other words, the Fed/Treasury will be forced to recognize the forced sale of gold @ $260 to $360 or more, but not more than $430 at the most.  That is, Americans have lost their most valuable and prized asset – Gold – due to fraud perpetrated by the Fed/Treasury officials.  It happened without their knowledge because the Fed/Treasury balance sheets were never audited.  The office of OCC (Office of Controller of Currency) conducts only physical verification of the gold, not the true ownership. This is why Ron Paul, Senator, introduced a bill to audit the books of Fed. That is not enough. The gold is handled mainly by US treasury – Fed merely manages the operational part.

Chap14 GoldYou must read my book “Sub Prime Resolved” Chapter 14 titled “Where is MacKenna’s Gold” which deals with this issue comprehensively in 30 pages and proves beyond doubt that “United States has lost almost 78% of its gold through covert lending practices to certain banks, investment banks and hedge funds to depress the gold prices with intent to control the inflation numbers to help them justify lower interest rates”. The book uses same official figures churned out by the Fed/Treasury.

There is further possibility of more selling after the writing of this book. Total loss could be 90%

It is a Great EXPOSE since the Watergate Scandal.
The book goes to the bottom of the statistics and its couched language (with double meaning) to conceal the truth. Most of the gold must be belonging to European countries, Switzerland, IMF, World Bank and some other major gold owners such as Australia and Canada, who live in the dream world that their gold is safe in the vaults of the Fed.

When the Truth will come out?

If there is a massive call from the States and Local Governments like California to launch a campaign against the Fed/Treasury to give them enough funds by selling part of existing gold reserve of 8134 tons,  will meet with the denials from US Administration (Fed /Treasury) on evasive grounds.

Both Fed/Treasury know pretty well that  there is no real gold ownership left with them, and that selling of gold belonging to other nations would tantamount to committing breach of trust. Even the President of United States, be it were President Clinton, George Bush or Barack Obama, may not be aware of the constructive loss of US Gold through the hedgers who acted solely at the behest of same Fed/Treasury officials having ulterior motive.

The gold borrowers are obviously who is who in the field of banking, investment banking and hedge funds. If they are sought to be prosecuted, with the threat of perjury, they will come out in the open with the truth.  Some may even commit suicides rather than facing self – incriminatory charges and face imprisonment for life.

When the market realizes that the US no longer has as much gold as claimed, in fact having lost almost 77% as above, hell will break lose in the media, town hall meetings, White House, IMF Head Quarters, World Bank, European Union, Great Britain, China, India and Switzerland. Many of them are the real owners of the gold who presumed that it is lying in safe place in United States. They will realize first time that “United States is no longer safe place to keep gold” owned by them.  What they own is the piece of paper from United States promising them to deliver the gold on demand.

This is why I always mention in many articles and reply to readers that “Physical is Physical, and Paper is Paper” Asset.  One would be downright stupid if he entrusts tons of gold to some one other than him.  It is like entrusting one’s wife in the care of another man. Gold is the kind of assets that must be held by the owner physically.

Turning to recent rise in gold prices, please look at the Open Interest for December 2009 and February 2010. The shorter have been rolling over the contract every two months in the hope that the prices may drop so that they can cover their short position. However, the gold has been rising for over 5 years, denying them comfort so badly required by them. Look at the following “Open Interest” positions (our comments follow thereafter):

At the time of writing, the Open Interest position relating to gold for two key months – December 2009 and February 2010 were as under:

2009.12.01           GOLD Dec 2009 (NYMEX:GC.Z09) OI   12,041 contracts (= 1.204 Million Troy Ounces)

Or 37.45 tons valued at  US$ 1.442 Billions

2009.12.01           GOLD Feb 2010 (NYMEX:GC.G10.E)               OI  364,298 contracts (= 36.429 Millions Troy Ounces)

Or massive 1,133 tons of Gold- 50% of world annual production deliverable in One month

Now, look at the following chart of 27th November, 2009 when the gold dropped over 4.5% in matter of minutes:

Gold 6400 Short Recovery ChartIn matter of minutes, massive volume of over 111,000 contracts equivalent to 11,100,000 Troy Ounces or 345 tons were recorded.

Some operators manipulated to crash gold prices in matter of minutes so that they could buy back or cover the short position for Dec 2009 period.

The contracts were rolled over into Feb 2010 contracts where the Open Interest swelled to 364,298 contracts or 36.249 millions of troy ounces or massive 1,133 tons of gold. It represents 50% of world annual gold output to be delivered in one month only.

It is possible, the shorter may try to roll over the Feb 2010 contracts into longer dated months, provided the music does not stop here. If roll over facility is stopped, the short sellers would be obliged to default or doom to their failure.

Gold 6400 Short Receovery Data

  1. Just imagine. The gold prices have risen to US$ 1195 due to normal investment demand. If those buyers or large investment funds/hedge funds get the wind that there is no real gold with US, a massive rally may ensue due to heavy rush to buy back the contracts under Open Interest. The gold could propel into uncharted territory. It is just wild guess where the gold could possibly go to $1800, 2400, 3200 or 6400?
    1. The gold could go to$ 2400 due to normal Investment demand.  The gold reached the height of $ 850 in 1980s. If you use today’s inflation adjusted dollar, the price could go to $2400 presuming other factors remain constant.
    2. The US$ index now at about 74 could drop to psychological 71 level (intermediate) or 4%. It could drop further to 65 and finally solid support at 61. This means that the dollar could drop by 4% in very short term to 20% in 9 months. In other words, the rise in gold prices due to weaker dollar could rise by another $480 (20% of $2400)
    3. The recent financial crisis has thrown Central Banks (Fed, HM Treasury UK, European Central Bank, China, India, Australia, some smaller Asian nations, to print over $ 6.6 trillions of dollars equivalent. Considering the global Gold Stock of about 80,000 tons in the hands of Central Banks and Private individuals (like Indian/Chinese citizens). If you divide $ 6.6 trillions/80,000 tons of gold, the Equivalent price of excess money will be $ 2,566/ounce.
    4. Thus, the notional price of gold should be $2400 + $ 480 + $ 2566 = $5,446 ounce
    5. ADD to it if the short sellers have to rush to the market to cover their shorts which could be any number $ 1000 to $ 8000.  I am counting only $ 1000 as short covering effect, which would raise the price of gold to $ 6446 or say $6400 as the caption shows.
    6. In reality, the price could rise much higher because the $ will weaken much further, by another 40% ($ index to 40 or about). It will potentially add another $ 2000 per ounce.
    7. The price in non-dollar countries may not rise to that extent, because the effects will be muted to the extent of local currency appreciation.
    8. Gold and silver has outperformed every other Asset class in last 5 years. See the following table.Gold-6400-Table

SILVER

Historically ratio of gold to silver in 80s was just 16 to 20 (When the gold reached $ 800 the silver peaked at $ 50 giving Gold/Silver ratio of only 16. In that case, why our projections give Gold a target of 6400 and only $ 80 to Silver? It should have been $400. But not so, because Silver is no substitute of gold anywhere. It is available plenty and also, an industrial metal. Every copper producer has a bye-product of Silver. Gold is never a significant bye-product of any mining operation. Further, the industrial demand of Silver may gain if new cell battery known as “Ag-Zn” (Silver Zinc battery) replaces the Ni-Cd or Lithium battery.  The new Ag-Zn battery is reported to be super conductor of electricity and heat, far superior to any other battery in the market place. It also implies that Ni and Cadmium prices will turn softer due to lesser industrial demand.

TARGET QUALIFIER

  1. I have a Gold Target of $ 1500 (by March, 2010), $ 1800 (June, 2010), $ 2100 (Sep 2010), $2400 (Mar 2011), $2800 (Dec 2011) and $3200 (June 2012) in normal circumstances due to investor’s demand  and weakness in currency WITHOUT taking into account the short covering related rise or additional Central Bank purchase (such as India)
  2. The target could be higher by 50% and time shorter by 25%. If the short covering takes place, Add 50% to the above target  price.
  3. Dollar weakness will add more. The dollar has more credential to go lower.
    1. However, if the Obama Administration adopts the measures suggested in my book, the fall of dollar would be arrested or reversed.
    2. However, the gold prices of other countries will rise due to weakening of local currency. In U$ terms they would be corrected.
    3. If dollar is demonetized or reverse split (cancelling current dollars and replacing them 5 to 1), then the price of Gold will decline to reflect the reconstituted currency.
  4. In less than 30 months, if the present liberal monetary policy is pursued, and short covering does take place, the gold price could rise to $ 6400 in 30 months. Some major banks in the world could be busted. (2 from USA, 2 from UK, One from Europe) and One from Switzerland)
  5. Once the gold therefore rises to $ 3200 or about, the investors may adopt the trading strategy. Until then, they can afford to buy and hold for a period between 12 months to 18 months.
  6. There could be predominant selling from India, including Central Bank to book profit. Many may be tempted to sell gold and buy home which is the average dream of any young person.  You have to allow reduction of prices on account of this factor.
  7. The current prices of $1200 are therefore screaming bargain. They are still at 50% discount to inflation adjusted dollars.
  8. The investor must read my book “Sub Prime Resolved” that cost only $ 59.95. It is advisable to spend $ 60 before committing large resources for investment into Gold or Silver.
    1. If he disagrees wit the finding on Gold chapter, he may not adhere to above targets, but may scale down by 30% to 50%.
    2. He may ignore the effect of short covering.
  9. The investor may use the following table as guide. The figures input are dummy. See Excel spreadsheet for Download. The investors may use it to input their own variables.

Gold 6400 Excel

Anil Selarka, Author (Kalidas)
Hong Kong
, Ref: 09-035A  of  2009.12.02

STOP PRESS by Kalidas Dec 7, 2009

Attention Readers:

Recent correction is the welcome Buy opportunity. The correction was engineered on wrong notions as under:

  1. On Friday, Japan started buying dollar to weaken the Yen from 86 + level. Dollar strengthened as result against Yen initially.
  2. By coincidence, job numbers also came out. There was still a loss, but less than negative was treated as positive, and $ strength against Yen was treated as signs of bullish overtones for dollar.
  3. Meanwhile, Bank of America stated that it would reply TARP funds to the extent of $ 45 billions. No one knows the source of such funding. This was again taken as sign of recovery.
  4. As result, the $ index was up, gold down and Yen also down. This was triangular action. The money released did not go to Dow or NASDAQ or bonds.
  5. Early correction on Monday due to margin calls was expected. Once it is played out, the prices should begin to recover.  $1135 was the strongest point from where the rally started.
  6. Meanwhile, the Giethner wanted to play a step further. He mentioned that Citigroup would repay TARP money of $ 45 billions but he wanted to sell the Citigroup equity at about $ 6 billion profit.
    1. What is the source of $ 45 billions, no one knows the source.  To earn $ 45 billions, one has to raise lending by $ 9 trillions (presuming they make 0.5% spread). Citi is not giving loans even for $450 millions, where is the question of giving fresh loans of $ 9 trillions?
    2. Treasury Secretary Geithner mentioned about State making profit of $ 6 billions on Citigroup stock sale. What he DID NOT mention was that the state was on the verge of losing $ 306 billions of worthless debt guaranteed by US government at the behest of Hank Paulson and Jeff Bernanke.  So gain $ 6 billions, lose $ 306 billions – a giant hole of $ 300 billions is not shown to the Senators, Congressmen, Public, Media and Investors.
      1. Same worthless debt of $ 306 billions was bought by the same broker who had inside info.
      2. It was bought for pennies from the market, and after the US government guarantee was arranged, the”default status debts” were given AAA status and sold in the market at filthy profit.
      3. The said broker made billions of dollars of profits when other counterparts were still losing.
      4. The said broker then announced charity of $ 500 millions later.
    3. The media is broadcasting what the Administration and leading stock broker wants. Most of the business channels Anchors and their Assistants have worked for that broker. They also interview the same brokers from time to time.
    4. Lie, Lie and Lie – is what we get today almost in every media.  The media has been hyping recovery by seeing all negative signs as positive signs. If jobs lost are less, they consider signs of recovery; they consider “lost jobs” as lagging signs of recovery. If that was so, why same media did not give “sale” call when the employment was at its peak.
  7. Nothing has changed. The economy is still in shamble. Once the margin calls on gold’s Friday plunge dies down, the Gold will start booming again.  It is a question of one or two days.
  8. If you are convinced of the above analysis, treat the fall as golden buy opportunity for gold. It also applies to Silver.

Disclaimer:

Please note that this is the considered opinion of the author. The author is not liable or responsible for any loss or damage the investor may suffer if the situation does not develop as intended or forecast. This article is meant for only experienced investor or professionals who understand the vagaries of trade.