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Showing posts from January, 2012

Economic times: Silver: Brighter future than gold?

You'd probably laugh it off if someone claimed silver is the hottest metal, given gold's runaway prices. Since the beginning of the year gold is up about 20%. Silver, in the same period, has given a whopping 60% return. "This relative outperformance will continue," says Vijay Bhambwani, CEO, BSPLindia.com.

Silver price is at a 30-year high of $30 an ounce (Rs 45,665 per kg). Let us do a quick analysis to find out if you should invest in it.

Riding on high demand:Silver has more industrial applications than any other metal. A recent report by Hinde Capital says: "It's the best conductor of both heat and electricity, the most reflective, and second-most ductile and malleable element, after gold." The white metal is also being put to several new uses-water purification, air-handling systems and a natural biocide."New products using silver's biocidal qualities are being developed each year; clothing, bandages, toothbrushes, door-knobs (flu-protection…

India being pushed into a crisis by the world bank

The World Bank continues to push its agenda on water privatisation even though its much-heralded examples from recent years turned out to be such dismal failures. The result will destroy countless small farmers and hand over agriculture to the rich and corporations, says P Sainath.

08 May 2005 - It has been happening for some time. Maharashtra is not the first State. It won't be the last. The drive towards privatisation of water in this country was planned by the World Bank in the 1990s. The just-passed Maharashtra Water Resources Regulatory Authority Bill reeks of Bank edicts already out in 1998. In that year, the "The Irrigation Sector" report of the Bank (teamed up with the Indian Government) laid down the line.

It listed things that "need to be urgently put into practice." Among them: "drastically increasing and rationalising the current water rates." The rest of its "urgent needs" were the standard Bank rules for the capture of a count…

Gold: to go to 3000 by 2015-2017 (Rs 55000 per 10 gm current price 27000 per 10 gm)

In my opinion, gold is important to buy as it is the only liquid defence against inflation. People who took pension schemes 15 to 25 year back are finding the monthly pension amount to have far less buying power than expected. If that amount was put in gold gradually, instead of investment in pension schemes, they would have been spending out of their gold savings and have considerable wealth in the form of gold.
In September 2009, when gold was around $1000,  technical analysts on www.seekingalpha.com , a credible website for market movements, predicted gold to go to 1500 per ounce (Rs 25000 per 10 gm). In the same article, they also forecast it to go to 3000 by 2015,2017 Excerpt: As we look ahead over the next 5 years, with all of the money being printed worldwide, expect inflation to rear its ugly-head once again, a catalyst that could very well lead to the parabolic stage for Gold's bull market, where it goes to 3000 or even higher by 2015-2017. While inflation is the main rea…

MSN money: 5 reasons gold is headed for $3,000 (Rs.55000 per 10 gm current price is 27000 per 10 gm)

With the precious metal seeing some weakness since posting an all-time
high of more than $1,900 an ounce -- though it rebounded Tuesday to
about $1,800 -- that's the critical question for anyone who caught
gold's big run or who is wondering if it's too late to get in.Few investments bring out more passion than gold does. The folks known
as gold bugs never seem to think the price is high enough, while their
critics have been waiting since $1,000 for the bugs to get their
comeuppance.But for the rest of us, the challenge is figuring out whether gold's
move can go on. Analyzing that involves looking at the reasons gold
has been on a tear, and whether they'll continue to be in play.A careful look tells me $3,000 could indeed be in gold's future,
making upcoming dips buying opportunities. Here's why I think gold is
headed higher after a correction that could send gold down to $1,600
or lower -- and the best ways to buy in if you agree.Read full at: http://money.msn.com/exc…

JP morgan expects gold to go to $2500/ounce (or Rs.42000 per 10 gm)

We thought we had seen it all… Then JPM's Colin Fenton came out with a
prediction of gold hitting $2500 by year end. That's right: JP Morgan…
$2500…."Gold and sugar have potential to run a lot higher. It has been
clear for weeks that the prompt CMX gold price has been building in a
rising probability of a re-flaring of financial crisis, gaining by
9.7% since June 30 as the MSCI World Equity index dropped by 10.1%.
The correlation in daily price changes between these two assets has
dropped to –0.09 from +0.29 over the prior year. Gold's correlation
against TIPS has doubled to 0.35 from 0.18. Against Italian and
Spanish 5-year sovereign CDS prices, the gold correlation has moved to
0.27 and 0.32, from 0.07 and 0.04, respectively. Before the downgrade,
our view was that cash gold could average $1800 per oz by year end.
This view will likely now prove to be too conservative: spot gold
could drive to $2500 per oz or higher, albeit on very high
volatility." Funny, when discussing ye…

My analysis of silver price quoted on moneycontrol.com

Dollar falling as US economy shows recovery signs !!

Jan. 18 (Bloomberg) -- The dollar maintained losses from yesterday
against the euro before U.S. data today forecast to show industrial
production rose and confidence among homebuilders increased, reducing
demand for safer assets.The yen also held a drop versus the 17-nation currency after Spanish
and Greek borrowing costs fell at auctions yesterday, damping concern
the euro region's most-indebted members will struggle to fund
deficits. Greek Prime Minister Lucas Papademos will meet with a group
representing private bondholders today to discuss forgiving at least
half of the nation's debt. Portugal is scheduled to sell bills today."The U.S. economy is showing signs of recovery," said Thomas Averill,
managing director in Sydney at Rochford Capital, a currency and
interest-rate risk-management company. Haven currencies including the
yen and the dollar "will come under a bit more pressure" over the next
12 months, he said.Read full at: http://www.businessweek.com/news/2012…

JPMorgan Chase analyst: Gold headed to 2500 from current 1650 USD per ounce

Why gold is heading on up
A $3,000 price tag would have seemed farfetched a decade ago, when the
price was around $300, or even when gold first crossed $1,000 an ounce
in 2009. But the political and economic uncertainty pushing gold
higher isn't over, because debt and spending problems around the
developed world look so entrenched.Is gold really a safe haven?JPMorgan Chase analyst Colin Fenton just predicted gold could spike to
$2,500 an ounce over the next four months. And Tom Winmill, who
manages the Midas Fund (MIDSX -1.55%), thinks gold could trade as high
as $2,200 next year, largely due to national budget issues and
economic uncertainty. Then in early 2013 after the U.S. presidential
elections, an ongoing inability to deal with national spending and
debt issues may push it even higher, he believes.Winmilll won't put a number on how high a budget crisis at that point
would drive gold. But think of it this way: To get to $3,000, it takes
a spike of less than 30% from his projected 2012…

What recession?

Eager buyers for the new model of apple iphone fought among themselves
and hurled eggs at the apple store for not having enough stock !!Also see http://news.xinhuanet.com/english/china/2012-01/14/c_131359319.htm

A software project- a picture speaks a thousand words !!

Indian silver refining companies earning good from silver price rise

Hindustan Zinc's revenue from silver more than doubled to Rs 467 crore
(Rs 209 crore) in the first half of this fiscal while it logged an
increase of 58 per cent to Rs 544 crore last fiscal. The company's
mined metal production was at 840,000 tonnes in 2010-11 while it rose
three per cent to 398,000 tonnes in first six months of this fiscal.Its revenue from silver is expected to rise further with production at
Sindesar Khurd zinc mines expected to achieve its full capacity of 1.5
million tonnes this fiscal, said an analyst.PRICES SOFTENSilver prices, which are driven by demand from jewellery, coinage,
industrial and medical applications, have softened substantially after
hitting an all-time high of Rs 75,000 a kg in April last year. This
was largely due to investment-driven buying in line with global
markets, where the metal rose to a fresh 31-year high. Currently, it
is quoted at about Rs 52,000 a kg.Read more at: http://www.thehindubusinessline.com/companies/article2788172.ece

Lower earnings of IT companies per project- Clients ask IT firms like Infosys, TCS to bid for low-end projects through reverse auctions

BANGALORE: Some outsourcing customers are asking software companies to
bid for low-end back-office and application development projects
through reverse auctions, adding to the competitive pressures for
large companies like Tata Consultancy Services and Infosys.
For established outsourcing clients such as General Electric, as well
as small- to -mid-sized firsttime outsourcers in the US, Europe and
the Middle-East, reverse auctions are bringing down billing rates by
up to 40% in some instances and 10-15% on average.
Unlike an ordinary auction where buyers compete to procure goods or
services, in a reverse auction, sellers of outsourcing services are
asked to compete with each other for a portion of a software or
contact centre project.
Read more at: http://economictimes.indiatimes.com/tech/ites/clients-ask-it-firms-like-infosys-tcs-to-bid-for-low-end-projects-through-reverse-auctions/articleshow/11429049.cms

Gold jewellery demand as a measure of average gold consumption in difeerent countries.

Demand for jewelry was the biggest contributor to gold demand, accounting for 54 percent of the total. That’s a 17 percent rise despite gold prices jumping 26 percent in many currencies.









Read full at: http://www.usfunds.com/investor-resources/frank-talk/?i=5048

China’s, India's Gold Investment to make new records

India:
The World Gold Council (WGC) research showed that cumulative annual demand for gold in India would increase to excess of 1200 tonnes or nearly Rs. 250 crore at current price levels, a WGC statement said on Thursday. “In 2010, total annual consumer demand reached 963.1 tonnes. India’s continued rapid growth which will have significant impact on income and savings, will increase gold purchasing by almost 3 per cent per annum over the next decade,” the statement pointed out.
Read full at: http://andhrabusiness.com/NewsDesc.aspx?NewsId=India%E2%80%99s-annual-gold-demand-to-touch-1-200-tonne-in-2020-WGC.html

China:
Gold investment demand in China is likely to top a record 200 metric tons this year, the World Gold Council said.
The country’s investment demand surged 70 percent in 2010 to an all-time high of 187 tons, said Albert Cheng, the Far East managing director at the World Gold Council.
China’s “investment demand has picked up exponentially,” Cheng said yesterday in an interview in M…

Possible collapse of euro on the horizon and will hit global financial system: George Soros

HYDERABAD, JAN 5:
The collapse of the euro will have catastrophic consequences not only for Europe but for the global financial system because of inter-connectedness, said Mr George Soros, Chairman of Soros Fund Management which has assets of about $27 billion.
The euro-zone debt crisis is a direct consequence of the crash of world economy in 2008 and weakening of the currency may lead to the break-up of the European Union itself, he said at an interactive session here today.
“If the common currency broke down, it will then lead to the break-up of the European Union itself. So it is political problem. Thus, euro crisis in my opinion is something more serious and more threatening than the crash of 2008,” he added.

About George Soros: He is known as one of the most successful investors in the world. More about him: http://www.investopedia.com/university/greatest/georgesoros.asp#axzz1ii5XKU69

Read full at: http://www.thehindubusinessline.com/industry-and-economy/article2777983.ece

Gold Will Outperform realestate and equities(stocks and mutual funds) if we face Inflation or Deflation

History has taught us that certain assets perform better during
inflation, while other assets thrive in a deflationary environment.
There is a common perception that hard assets and commodities do well
during inflation and poorly in deflation, whereas and bonds and cash
have contrary performance. However, it is a misperception to lump gold
into the hard assets category since it performs equally well during
deflation.
Gold is a monetary metal with unique characteristics that preserves
its purchasing power both during high inflation and high deflation.
This is because gold offers protection both against depreciating
currencies as well as deflationary busts, bank-runs, insolvency and
other deflationary scenarios since it does not have any
counterparties.
You will see that gold outperformed virtually all other asset classes
both during times of great deflation, between 1929 and 1940, as well
as during times of great inflation, during 1968 to 1980.
Government bonds did reasonably well, but gold w…

What is deflation and how will we be affected

Inflation occurs when money becomes relatively less valuable than
goods. Then deflation is simply the opposite, that over time money is
becoming elatively more valuable than the other goods in the economy.
Following the logic of that article, deflation can occur because of a
combination of four factors:The supply of money goes down.
The supply of other goods goes up.
Demand for money goes up.
Demand for other goods goes down.
Deflation generally occurs when the supply of goods rises faster than
the supply of money, which is consistent with these four factors.
These factors explain why the price of some goods increase over time
while others decline. Personal computers have sharply dropped in price
over the last fifteen years. This is because technological
improvements have allowed the supply of computers to increase at a
much faster rate than demand or the supply of money. During the 1980's
there was a sharp increase in the price of 1950's baseball cards, due
to a huge increase in demand and a…

Islamic Banking: Kerala Govt Welcomes HC Order

The Kerala government today welcomed the High Court's verdict allowing
the setting up of an Islamic Financial Institution (IFI) in the state
with the support of Kerala State Industrial Development Corporation
(KSIDC) and said the institutions would start soon.The Al Barakah Financial Services Ltd will have an authorised share
capital of Rs 1000 crores including 11 per cent Equity contribution
from KSIDC.The 12 member-director board of the company will have 10 private
investors and 2 nominees from KSIDS as directors."Gulf-based NRI businessman P Mohammed Ali will be the chairman of the
company. Various Kerala-based entrepreneurs like P N C Menon, E M
Najeeb, M A Yusaff Ali, Siddique Ahmmed and P A Ibrahim Haji will be
some other members of the board," he said.From: http://news.outlookindia.com/items.aspx?artid=710881