FUNDAMENTAL AND TECHNICAL ANALYSIS ON GOLD
Project report submitted in Partial fulfillment for the award of
MASTER OF BUSINESS ADMINISTRATION
PRINCETON P.G COLLEGE
(OSMANIA UNIVERSITY) HYDERABAD (2008-10) 1
I Mr. BADRINATH bearing ROLL NO student of PRINCETON P.G COLLEGE OSMANIA UNIVERSITY, hereby declare that the project report titled “A STUDY ON FUNDAMENTAL AND TECHNICAL ANALYSIS OF GOLD” AT “RELIGARE COMMODITIES Ltd”” submitted for the partial fulfillment of the requirement of the award of degree in MASTER OF BUSINESS ADMINISTRATION, is a bona fide work done by me and it is not submitted to any other university or Institution for the award of any Degree, Diploma Certificate or published any time before.
Date: Place: Hyderabad BADRINATH
Aim: An empirical study on GOLD based on fundamental and technical analysis. Abstract: We study the gold and silver prices based on fundamental analysis like
inventories in the entire globe, central bank reserves and currency fluctuations. We study the Inventories which will effect due to strikes, political conditions and demand & supply mismatch. According to central Bank policies and central agreements reserves will various. Currency trading on Dollar verses Euro or Dollar verses sterling pound causes volatility which leads to gold/silver price fluctuations. We forecast the gold and silver prices with advanced technical analysis tools by using lead &lag indicators, Elliot wave analysis and Fibonacci series. We applied lag indicators on trending markets and lead indicators for trading markets. Lag indicators (like MACD or moving averages) smoothens the price trends so that we can find out prices are in the trending zone or not. We can apply this method on both bullish as well as bearish markets. Lead indicators are like oscillators for find out the trading ranges on sideways markets. We apply Elliot wave for gold and silver prices forecast for long term analysis. We combine the Fibonacci series with Elliot wave for better results and absolute forecast. In this study we are applying both fundamental and technical analysis for predicting the future price actions based on historical data and previous trends.
Words never seemed so inadequate to acknowledge anybody’s cooperation and guidance, as now. Many people have tended their ability and timely support and it’s because of them that this study was made possible. I extend my sincere thanks to, Head of the department PRINCETON P.G COLLEGE for her continuous guidance. I also express my heartfelt thanks to Research analyst of RELIGARE COMMODITIES Ltd for his constant help in guiding providing me the necessary information throughout the preparation of this project. Finally, many thanks to all of them not mentioned who have contributed their bit towards the study.
TABLE OF CONTENT
Chapter No 1 2 3 4 5 6 7 8 9
Content Introduction Objectives Research and Methodology Review of literature Company Profile Data Analysis and Interpretation Findings and Suggestions Conclusion Bibliography
LIST OF TABLES
Fibonacci Ratio Table 29
LIST OF FIGURES
FIGURES PAGE NUMBERS 21 22 24 34 44 55 57 62 1.FIVE WAVE PATTERN 2.WAVE MODE 3.ESSENTIAL DESIGN 4.PRICE TREND 5.DEMAND AND CONSUMPTION OF GOLD 6.GOLD LONG TERM TREND 7.GOLD SHORT TERM TREND 8.CORRELATION BETWEEN GOLD AND CURRENCY
CHAPTER - I
Introduction: The high Volatility in equity market with high-risk and the arrival of low interest rates have increased the investor presence in alternative investments such as gold and silver. In India, gold has traditionally played a multi-faceted role. Apart from being used for armament purpose, it has also served as an asset of the last resort and a hedge against inflation and currency depreciation. But most importantly, it has most often been treated as an investment. Gold and silver supply primarily comes from mine production, official sector sales of global central banks, old gold scrap and net disinvestments of invested gold. Out of the total supply of 3870 tons last year, 66% was from mine production, 20% from old gold scrap and 14% from official sector sales. Demand globally generate from fabrication (jewellery and other fabrication), bar hoarding, net producer hedging and Implied investment. The following factors have been predominantly responsible for the surge in the yellow metal: Geopolitical tensions across the world particularly in the Middle East and Nigeria, the threat of further attacks from Al Qaeda in the oil rich Middle East continues. The continued stand off between Iran and the west over Tehran’s resumption of its nuclear program is likely to underpin price.
Any rallies in crudeoil futures are likely to see fresh buying interest emerge as gold is considered as hedge against inflation.
Another crucial factor supportive of demand is the faster GDP growth in developing countries particularly India as compare the industrialized nations. Expectations of an increase in demand for the marriage season in India could see emergence of physical buying interest.
HISTORY OF GOLD
Gold has a history of more than 7000 years in India, which can be find in religious book of Hindu, where it is considered as a metal of immense value. But looking at the history of world, gold is found at the Egypt at 2000B.C., which is the first metal used by the humans value for ornament and rituals. Gold has long been considered one of the most precious metals, and its value has been used as the standard for many currencies (known as the gold standard) in history. Gold has been used as a symbol for purity, value, royalty, and particularly roles that combine these properties. As a tangible investment gold is held as part of a portfolio by the countries as a reserves because over the long period gold has an extensive history of maintaining its value. It has in gained ground in relation to currencies owing to inflation. However, gold does become particularly desirable in times of extremely weak confidence and during hyperinflation because gold maintains its value even as fiat money becomes worthless. When the value of currency depreciate. But above all comment, it has a special role in India and in certain countries, gold Jewelry is worn for ornamental value on all social functions, festivals and celebrations. It is the popular form of investment in rural areas between the farmers after having bumper crop or after harvesting, this all factor makes India as largest consumer (18.7% of world total demand in 2004) and importer of gold due to its low production, which is negligible, and untapped gold reserves. This is due to lack of new technology in finding gold reserves and low interest shown by government in financing, encouraging for exploration programs in gold mines.
HISTORY OF GOLD TRADING
Gold future trading debuted first at Winnipeg Commodity Exchange (know is Comex) in Canada in 1972. The gold contract gain popularity among traders, led to many countries had too started gold future trading. Which include London gold future, Sydney future exchange, Singapore International Monetary Exchange (Simex), Tokyo Commodity Exchange (Tocom), Chicago Mercantile Exchange, Chicago Board of Trade (CBOT), Shanghai Gold Exchange, Dubai Gold and Commodity Exchange are some of the world Top recognized exchange, and in India, National Commodity and Derivative Exchange (NCDEX) and Multi-Commodity Exchange (MCX), and National Board of Trade (NBOT) are some Indian exchanges where Gold are traded.History of gold trading in India is dates back to 1948 with Bombay Bullion Association, which is formed by the group of Merchants.
PRODUCTION OF GOLD
Till know the total gold is extracted from the mines is about $1 trillion dollar, which is accumulated in physical form is enough to built Eiffel tower. Annual gold production worldwide is about US$35 billion and by far the one of the largest-trading world commodity. Worldwide, gold mines produce about 2,464 tonnes in the year 2004 from total supply of 3328 tonnes but unable to meet identifiable demand of 3497 tonnes. Gold is mined in more than 118 countries around the world, with the large number of development projects in these countries expected to keep production growing well into the next century. Currently, South Africa is the largest gold producing country, followed by the United States, Australia, Canada, Indonesia, Russia and others, some of this countries also account for highest gold reserves from potential 50,000 tonnes of world-wide reserves.
GLOBAL GOLD PRODUCTION 2004 (metric tons)
South Africa: 343 United States: 262 Australia: 258 China: 217 Canada: 129 Indonesia: 114 Ghana: 58 Guyana: 15 Source: GFMS
CHAPTER - 2
OBJECTIVE AND LIMITATIONS
The main objective of this project is to forecast gold and
silver prices with advanced technical analysis tools by using lead &lag indicators, Elliot wave analysis and Fibonacci series. We applied lag indicators on trending markets and lead indicators for trading markets. We apply Elliot wave analysis with gold and silver prices forecast for long term .We combine the Fibonacci series with Elliot wave for better results and absolute forecast. We also analyze gold and silver prices based on fundamental analysis like inventories, central bank reserves and dollar fluctuations.
LIMITATION OF STUDY
The study is based on the parameters of following factors. 1. It is based on Research done by authors and organizations like WGC, GFMS, News, Articles and its affect on gold. 2. Technical Analysis is done on Two methods by taking 7 & 14 day moving averages (DMA) & Relative Strength Index (RSI) and price movement, Buy and Sell signal suggests on the basis of this study characteristic of this methods. 3. The suggestion is based on the study on Fundamental and Technical Analysis such as price movement, Relationship of gold with other factors, Volumes and Open Interest (OI). 4. This analysis will be holding good for a limited time period that is based on present scenario and study conducted, future movement on gold price may or may not be similar.
CHAPTER - 3
RESEARCH AND METHODODLOGY
RESEARCH OF THE STUDY
TYPE OF RESEARCH The research is basically a descriptive research. In this project Descriptive research methodologies i s us e d . The research methodology will be used for gathering details of different aspects of GOLD ANALYSIS.
SOURCE OF DATA COLLECTION Secondary data will be collected from articles in journals and magazines. The database of MCX, FMC, GOLD COUNSIL and COMEX will be taken. As this topic is very new, article from other w e b s i t e l i n k s i s required. Report submitted b y MCX/FMC committee is used.
METHODOLOGY OF THE STUDY Data collection instrument:
The data that is used in this project is also in the form of secondary nature. The data is collected from secondary sources such as various websites, journals, newspapers, books, etc. the analysis used in this project has been done using selective technical tools. In Equity market, risk is analyzed and trading decisions are taken on basis of technical analysis. It is collecting share prices of selected companies for a period of five years. TOOLS USED: 1. Winquote is using for charts building
2.Ms –excel is suing for demand and supply graphs.
CHAPTER - 4
REVIEW OF LITERATURE
Why central banks hold gold
Monetary authorities have long held gold in their reserves. Today their stocks amount to some 30,000 tonnes - similar to their holdings 60 years ago. It is sometimes suggested that maintaining such holdings is inefficient in comparison to foreign exchange. However, there are good reasons for countries continuing to hold gold as part of their reserves. These are recognised by central banks themselves although different central banks would emphasise different factors. Diversification Economic security Physical security Unexpected needs Confidence Income Insurance How much gold to hold?
In any asset portfolio, it rarely makes sense to have all your eggs in one basket. Obviously the price of gold can fluctuate - but so too do the exchange and interest rates of currencies held in reserves. A strategy of reserve diversification will normally provide a less volatile return than one based on a single asset. Gold has good diversification properties in a currency portfolio. These stem from the fact that its value is determined by supply and demand in the world gold markets, whereas currencies and government securities depend on government promises and the variations in central banks’ monetary policies. The price of gold therefore behaves in a completely different way from the prices of currencies or the exchange rates between currencies.
Gold is a unique asset in that it is no one else's liability. Its status cannot therefore be undermined by inflation in a reserve currency country. Nor is there any risk of the liability being repudiated. Gold has maintained its value in terms of real purchasing power in the long run and is thus particularly suited to form part of central banks' reserves. In contrast, paper currencies always lose value in the long run and often in the short term as well.
Countries have in the past imposed exchange controls or, at the worst, total asset freezes. Reserves held in the form of foreign securities are vulnerable to such measures. Where appropriately located, gold is much less vulnerable. Reserves are for using when you need to. Total and incontrovertible liquidity is therefore essential. Gold provides this.
If there is one thing of which we can be certain, it is that today’s status quo will not last forever. Economic developments both at home and in the rest of the world can upset countries’ plans, while global shocks can affect the whole international monetary system. Owning gold is thus an option against an unknown future. It provides a form of insurance against some improbable but, if it occurs, highly damaging event. Such events might include war, an unexpected surge in inflation, a generalised crisis leading to repudiation of foreign debts by major sovereign borrowers, a regression to a world of currency or trading blocs or the international isolation of a country. In emergencies countries may need liquid resources. Gold is liquid and is universally acceptable as a means of payment. It can also serve as collateral for borrowing.
The public takes confidence from knowing that its Government holds gold - an indestructible asset and one not prone to the inflationary worries overhanging paper money. Some countries give explicit recognition to its support for the domestic currency. And rating
agencies will take comfort from the presence of gold in a country's reserves. The IMF's Executive Board, representing the world's governments, has recognized that the Fund's own holdings of gold give a "fundamental strength" to its balance sheet. The same applies to gold held on the balance sheet of a central bank.
Gold is sometimes described as a non income-earning asset. This is untrue. There is a gold lending market and gold can also be traded to generate profits. There may be an "opportunity cost" of holding gold but, in a world of low interest rates, this is less than is often thought. The other advantages of gold may well offset any such costs.
The opportunity cost of holding gold may be viewed as comparable to an insurance premium. It is the price deliberately paid to provide protection against a highly improbable but highly damaging event. Such an event might be war, an unexpected surge of inflation, a generalized debt crisis involving the repudiation of foreign debts by major sovereign borrowers, a regression to a world of currency and trading blocs, or the international isolation of a country.
How much gold?
This is a matter for countries and central banks to decide in the light of their particular circumstances. The international average is about 10.2% at current market prices but, in the EU it is over 50% and the USA holds around 75% of its reserves in gold. Countries facing particular volatility in their economic and/or political circumstances will want to consider the level of gold in their reserves.
As per technical analysis concern we approached various methods like Elliot wave with Fibonacci serious, Exponential moving average and price channel. We described briefly over here. Elliotwave:
Although it is the best forecasting tool in existence, the Wave Principle is not primarily a forecasting tool; it is a detailed description of how markets behave. Nevertheless, that description does impart an immense amount of knowledge about the market's position within the behavioral continuum and therefore about its probable ensuing path. The primary value of the Wave Principle is that it provides a context for market analysis. This context provides both a basis for disciplined thinking and a perspective on the market's general position and outlook. At times, its accuracy in identifying, and even anticipating, changes in direction is almost unbelievable. Many areas of mass human activity follow the Wave Principle, but the stock market is where it is most popularly applied. Indeed, the stock market considered alone is far more important than it seems to casual observers. The level of aggregate stock prices is a direct and immediate measure of the popular valuation of man's total productive capability. That this valuation has form is a fact of profound implications that will ultimately revolutionize the social sciences. That, however, is a discussion for another time. R.N. Elliott's genius consisted of a wonderfully disciplined mental process, suited to studying charts of the Dow Jones Industrial Average and its predecessors with such thoroughness and precision that he could construct a network of principles that covered all market action known to him up to the mid-1940s. At that time, with the Dow in the 100s, Elliott predicted a great bull market for the next several decades that would exceed all expectations at a time when most investors felt it impossible that the Dow could even better its 1929 peak. As we shall see, phenomenal stock market forecasts, some of pinpoint accuracy years in advance, have accompanied the history of the application of the Elliott Wave approach. Elliott had theories regarding the origin and meaning of the patterns he discovered, which we will present and expand upon in Lessons 16-19. Until then, suffice it to say that the patterns described in Lessons 1-15 have stood the test of time. Often one will hear several different interpretations of the market's Elliott Wave status, especially when cursory, off-the-cuff studies of the averages are made by latter day experts. However, most uncertainties can be avoided by keeping charts on both arithmetic andsemilogarithmic scale and by taking care to follow the rules and guidelines as laid down in this course. Welcome to the world of Elliott. In The Elliott Wave Principle — A Critical Appraisal, Hamilton Bolton made this opening statement: As we have advanced through some of the most unpredictable economic climate imaginable, covering depression, major war, and postwar reconstruction and boom, I have noted how well Elliott's Wave Principle has fitted into the facts of life as they have developed, and have accordingly gained more confidence that this Principle has a 20 good quotient of basic value. "The Wave Principle" is Ralph Nelson Elliott's discovery that social, or
Although it is the best forecasting tool in existence, the Wave Principle is not primarily a forecasting tool; it is a detailed description of how markets behave. Nevertheless, that description does impart an immense amount of knowledge about the market's position within the behavioral continuum and therefore about its probable ensuing path. The primary value of the Wave Principle is that it provides a context for market analysis. This context provides both a basis for disciplined thinking and a perspective on the market's general position and outlook. At times, its accuracy in identifying, and even anticipating, changes in direction is almost unbelievable. Many areas of mass human activity follow the Wave Principle, but the stock market is where it is most popularly applied. Indeed, the stock market considered alone is far more important than it seems to casual observers. The level of aggregate stock prices is a direct and immediate measure of the popular valuation of man's total productive capability. That this valuation has form is a fact of profound implications that will ultimately revolutionize the social sciences. That, however, is a discussion for another time. R.N. Elliott's genius consisted of a wonderfully disciplined mental process, suited to studying charts of the Dow Jones Industrial Average and its predecessors with such thoroughness and precision that he could construct a network of principles that covered all market action known to him up to the mid-1940s. At that time, with the Dow in the 100s, Elliott predicted a great bull market for the next several decades that would exceed all expectations at a time when most investors felt it impossible that the Dow could even better its 1929 peak. As we shall see, phenomenal stock market forecasts, some of pinpoint accuracy years in advance, have accompanied the history of the application of the Elliott Wave approach. Elliott had theories regarding the origin and meaning of the patterns he discovered, which we will present and expand upon in Lessons 1619. Until then, suffice it to say that the patterns described in Lessons 1-15 have stood the test of time. Often one will hear several different interpretations of the market's Elliott Wave status, especially when cursory, off-the-cuff studies of the averages are made by latter day experts. However, most uncertainties can be avoided by keeping charts on both arithmetic andsemilogarithmic scale and by taking care to follow the rules and guidelines as laid down in this course. Welcome to the world of Elliott.
1.2 Short History
1.3 Basic Tenets
Under the Wave Principle, every market decision is both produced by meaningful information and produces meaningful information. Each transaction, while at once an effect, enters the fabric of the market and, by communicating transactional data to investors, joins the chain of causes of others' behavior. This feedback loop is governed by man's social nature, and since he has such a nature, the process generates forms. As the forms are repetitive, they have predictive value. Sometimes the market appears to reflect outside conditions and events, but at other times it is entirely detached from what most people assume are causal conditions. The reason is that the market has a law of its own. It is not propelled by the linear causality to which one becomes accustomed in the everyday experiences of life. Nor is the market the cyclically rhythmic machine that some declare it to be. Nevertheless, its movement reflects a structured formal progression. That progression unfolds in waves. Waves are patterns of directional movement. More specifically, a wave is any one of the patterns that naturally occur under the Wave Principle, as described in Lessons 1-9 of this course. The Five Wave Pattern In markets, progress ultimately takes the form of five waves of a specific structure. Three of these waves, which are labeled 1, 3 and 5, actually effect the directional movement. They are separated by two countertrend interruptions, which are labeled 2 and 4, as shown in Figure 1-1. The two interruptions are apparently a requisite for overall directional movement to occur.
Figure 1-1 R.N. Elliott did not specifically state that there is only one overriding form, the "five wave" pattern, but that is undeniably the case. At any time, the market may be identified as being somewhere in the basic
1.4 Wave Mode
There are two modes of wave development: motive and corrective. Motive waves have a five wave structure, while corrective waves have a three wave structure or a variation thereof. Motive mode is employed by both the five wave pattern of Figure 1-1 and its samedirectional components, i.e., waves 1, 3 and 5. Their structures are called "motive" because they powerfully impel the market. Corrective mode is employed by all countertrend interruptions, which include waves 2 and 4 in Figure 1-1. Their structures are called "corrective" because they can accomplish only a partial retracement, or "correction," of the progress achieved by any preceding motive wave. Thus, the two modes are fundamentally different, both in their roles and in their construction, as will be detailed throughout this course. In his 1938 book, The Wave Principle, and again in a series of articles published in 1939 by Financial World magazine, R.N. Elliott pointed out that the stock market unfolds according to a basic rhythm or pattern of five waves up and three waves down to form a complete cycle of eight waves. The pattern of five waves up followed by three waves down is depicted in Figure 1-2.
Figure 1-2 One complete cycle consisting of eight waves, then, is made up of two distinct phases, the motive phase (also called a "five"), whose subwaves are denoted by numbers, and the corrective phase (also called a "three"), whose subwaves are denoted by letters. The sequence a, b, c corrects the sequence 1, 2, 3, 4, 5 in Figure 1-2. At the terminus of the eight-wave cycle shown in Figure 1-2 begins a second similar cycle of five upward waves followed by three downward waves. A third advance then develops, also consisting of five waves up. This third advance completes a five wave movement of one degree larger than the waves of which it is composed. The result is as shown in Figure 1-3 up to the peak labeled (5).
2.1 Introducing Fibonacci
Statue of Leonardo Fibonacci, Pisa, The inscription reads, "A. Leonardo Fibonacci, Matematico Piisano del Secolo Photo by Robert R. Prechter, Sr.
Italy. Insigne XII."
HISTORICAL AND MATHEMATICAL BACKGROUND OF THE WAVE PRINCIPLE The Fibonacci (pronounced fib-eh-nah´-chee) sequence of numbers was discovered (actually rediscovered) by Leonardo Fibonacci da Pisa, a thirteenth century mathematician. We will outline the historical background of this amazing man and then discuss more fully the sequence (technically it is a sequence and not a series) of numbers that bears his name. When Elliott wrote Nature's Law, he referred specifically to the Fibonacci sequence as the mathematical basis for the Wave Principle. It is sufficient to state at this point that the stock market has a propensity to demonstrate a form that can be aligned with the form present in the Fibonacci sequence. (For a further 27 discussion of the mathematics behind the Wave Principle, see "Mathematical Basis of Wave Theory," by Walter E. White, in New Classics Library's forthcoming book.)
2.2 Introducing Fibonacci
Although the world later almost lost sight of Fibonacci, he was unquestionably a man of his time. His fame was such that Frederick II, a scientist and scholar in his own right, sought him out by arranging a visit to Pisa. Frederick II was Emperor of the Holy Roman Empire, the King of Sicily and Jerusalem, scion of two of the noblest families in Europe and Sicily, and the most powerful prince of his day. His ideas were those of an absolute monarch, and he surrounded himself with all the pomp of a Roman emperor. The meeting between Fibonacci and Frederick II took place in 1225 A.D. and was an event of great importance to the town of Pisa. The Emperor rode at the head of a long procession of trumpeters, courtiers, knights, officials and a menagerie of animals. Some of the problems the Emperor placed before the famous mathematician are detailed in Liber Abacci. Fibonacci apparently solved the problems posed by the Emperor and forever more was welcome at the King's Court. When Fibonacci revised Liber Abacci in 1228 A.D., he dedicated the revised edition to Frederick II. It is almost an understatement to say that Leonardo Fibonacci was the greatest mathematician of the Middle Ages. In all, he wrote three major mathematical works: the Liber Abacci, published in 1202 and revised in 1228, Practica Geometriae, published in 1220, and Liber Quadratorum. The admiring citizens of Pisa documented in 1240 A.D. that he was "a discreet and learned man," and very recently Joseph Gies, a senior editor of the Encyclopedia Britannica, stated that future scholars will in time "give Leonard of Pisa his due as one of the world's great intellectual pioneers." His works, after all these years, are only now being translated from Latin into English. For those interested, the book entitled Leonard of Pisa and the New Mathematics of the Middle Ages, by Joseph and Frances Gies, is an excellent treatise on the age of Fibonacci and his works. Although he was the greatest mathematician of medieval times, Fibonacci's only monuments are a statue across the Arno River from the Leaning Tower and two streets which bear his name, one in Pisa and the other in Florence. It seems strange that so few visitors to the 179-foot marble Tower of Pisa have ever heard of Fibonacci or seen his statue. Fibonacci was a contemporary of Bonanna, the architect of the Tower, who started building in 1174 A.D. Both men made contributions to the world, but the one whose influence far exceeds the other's is almost unknown.
2.3 The Fibonacci Sequence
In Liber Abacci, a problem is posed that gives rise to the sequence of numbers 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, and so on to infinity, known today as the Fibonacci sequence. The problem is this: How many pairs of rabbits placed in an enclosed area can be produced in a single year from one pair of rabbits if each pair gives birth to a new pair each month starting with the second month?
In arriving at the solution, we find that each pair, including the first pair, needs a month's time to mature, but once in production, begets a new pair each month. The number of pairs is the same at the beginning
Exponential Moving Average (EMA)
In order to reduce the lag in simple moving averages, technicians often use exponential moving averages (also called exponentially weighted moving averages). EMA's reduce the lag by applying more weight to recent prices relative to older prices. The weighting applied to the most recent price depends on the specified period of the moving average. The shorter the EMA's period, the more weight that will be applied to the most recent price. For example: a 10-period exponential moving average weighs the most recent price 18.18% while a 20period EMA weighs the most recent price 9.52%. As we'll see, the calculating and EMA is much harder than calculating an SMA. The important thing to remember is that the exponential moving average puts more weight on recent prices. As such, it will react quicker to recent price changes than a simple moving average. Here's the calculation formula.
Exponential Moving Average Calculation
Exponential Moving Averages can be specified in two ways - as a percent-based EMA or as a period-based EMA. A percent-based EMA has a percentage as it's single parameter while a period-based EMA has a parameter that represents the duration of the EMA. The formula for an exponential moving average is:
EMA(current) = ( (Price(current) - EMA(prev) ) x Multiplier) + EMA(prev) For a percentage-based EMA, "Multiplier" is equal to the EMA's specified percentage. For a period-based EMA, "Multiplier" is equal to 2 / (1 + N) where N is the specified number of periods. For example, a 10-period EMA's Multiplier is calculated like this: (2 / (Time periods + 1) ) = (2 / (10 + 1) ) = 0.1818 (18.18%) This means that a 10-period EMA is equivalent to an 18.18% EMA. Note: StockCharts.com only support period-based EMA's. Below is a table with the results of an exponential moving average calculation for Eastman Kodak. For the first period's exponential moving average, the simple moving average was used as the previous period's exponential moving average (yellow highlight for the 10th period). From period 11 onward, the previous period's EMA was used. The calculation in period 11 breaks down as follows: (C - P) = (57.15 - 59.439) = -2.289 (C - P) x K = -2.289 x .181818 = -0.4162 ( (C - P) x K) + P = -0.4162 + 59.439 = 59.023
The 10-period simple moving average is used for the first calculation only. After that the previous period's EMA is used.
Note that, in theory, every previous closing price in the data set is used in
the calculation of each EMA that makes up the EMA line. While the impact of older data points diminishes over time, it never fully disappears. This is true regardless of the EMA's specified period. The effects of older data diminish rapidly for shorter EMA's. than for longer ones but, again, they never completely disappear.
As per Gold candlestick charts are prices are in the bullish phase.if we are look in to the price trend for past couple of days 7 bullish candles out of 10 candles has formed.Which means prices are more postive and trend would be expected to continue. As per the moving averages concern EMA(5) is above the EMA(6) which shows prices are postive territory. Open interest is negaive which is postive divergence for prices concern. As per MACD hisorigm , the historigm is in postive zone which leads trend is is intact.Ofcourse already the trend confirms bullish so prices would be in bullish zone for the next couple of days.
CHAPTER - 5
Religare Enterprises Limited
Religare Enterprises Limited (REL), is one of the leading integrated financial services groups of India. REL's businesses are broadly clubbed across three key verticals, the Retail, Institutional and Wealth spectrums, catering to a diverse and wide base of clients. The vision is to build Religare as a globally trusted brand in the financial services domain and present it as the 'Investment Gateway of India'. All employees of the group guided by an experienced and professional management team are committed to providing financial care, backed by the core values of diligence and transparency. REL offers a multitude of investment options and a diverse bouquet of financial services with its pan India reach in more than 1550 locations across more than 460 cities and towns. REL also currently operates from 10 countries globally following its acquisition of London's oldest brokerage & investment firm, Hichens, Harrison & Co. plc.
With a view to expand, diversify and introduce offerings benchmarked against global best practices, Religare operates its Life Insurance business in partnership with the global major – Aegon. For its wealth management business, Religare has partnered with Australia based financial services major-Macquarie. Religare has also partnered with Vistaar Entertainment to launch India's first SEBI approved Film Fund offering a unique alternative asset class of investments.
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The Religare name is paired with the symbol of a four-leaf clover. Traditionally, it is considered good fortune to find a four-leaf clover as there is only one four-leaf clover for every 10,000 three-leaf clovers found. For us, each leaf of the clover has a special meaning. It is a symbol of Hope. Trust. Care. Good Fortune.
For the world, it is the symbol of Religare.
The first leaf of the clover represents Hope. The aspirations to succeed. The dream of becoming. Of new possibilities. It is the beginning of every step and the foundation on which a person reaches for the stars. The second leaf of the clover represents Trust. The ability to place one’s own faith in another. To have a relationship as partners in a team. To accomplish a given goal with the balance that brings satisfaction to all, not in the binding, but in the bond that is built. The third leaf of the clover represents Care. The secret ingredient that is the cement in every relationship. The truth of feeling that underlines sincerity and the triumph of diligence in every aspect. From it springs true warmth of service and the ability to adapt to evolving environments with consideration to all. The fourth and final leaf of the clover represents Good Fortune. Signifying that rare ability to meld opportunity and planning with circumstance to generate those often looked for remunerative moments of success. Hope. Trust. Care. Good Fortune. All elements perfectly combine in the emblematic and rare, four-leaf clover to visually symbolize the values that bind together and form the core of the Religare vision.
CHAPTER - 6
DATA ANALYSIS & INTERPRETATION
DEMAND AND CONSUMPTION OF GOLD
Gold produced from different sources and demanded for consumption in form of Jewellery, Industrial applications, Government & Central bank Investment and Private investor, which has been worth US$ 38 billion on average over the past five years in world. Total of world gold produced is mostly consumed by different sectors are Jewellerys 80%, Industrial application 11.5% and rest of gold is used as investment purpose 8.5%. Considering the situation in India, the demand for Gold consumption is far more ahead than its availability through production, scrap or recycled gold. Where gold production in India is only 2tonnes, where demand is 18.7% of world gold consumption, which make India a leading consumer of gold followed by Italy, Turkey, USA, China, Japan. According to Countries wise demand, the following graph shows the demand in each country. Large part constitute by Jewelry consumption with 85.56% during 2004 by Indian consumers, who seem to spend
a disproportionate percentage of their disposable income on gold and gold jewelry.
Gold fabrication for domestic and international market, also formed large part of business in India with 527 tonnes of gold fabricated in India in 2004, making world largest fabricator which is 60% more than its closet competitor Italy, Turkey, USA. But this Jeweller Fabrication is unable to generate much revenue, as most of its consumed in India (479 tonnes).
Ind ia Italy 42.20% 11.10% Turkey US China Japan Rest o f world 8.50%
GOLD CONSUMPTION IN INDIA
India consumed around 18% of world Gold produced. Even though it only contribute 1.6% of Global GDP.
“Traditionally, Gold has been a good safety net for Indian households. However, the sharp rise in gold imports over the last three years when the rupee has started appreciating, inflation is relatively low, banking facilities are improving And economic can confidence has picked up, is surprising” say Market watchers.(Source: -Economic Times, Article, “ Forget sensex, the Gold rush is on”, July 18 ‘05) The demand is much that it consumed more than 1.5 times of US consumption of gold. Increasing by nearly 60% in 2003-04, but during this fiscal Gold imports increased by another 58%, with Import of gold and silver account around $11 billion consumption increased by 88% during March’05quarter.
Uses of Gold 1) Jewellery fabrication: The largest source of demand is the jewelry industry. In new years, demand from the jewelry industry alone has exceeded Western mine production. This shortfall has been bridged by supplies from reclaimed jewelry and other industrial scrap, as well as the release of official sector reserves. Gold's workability, unique beauty, and universal appeal make this rare precious metal the favorite of jewelers all over the world. India is the world's foremost gold jewellery fabricator and consumer with fabricator and consumption annually of over 600 tons according to GFMS. Measures of consumption and fabrication are made more difficult because Indian jewellery often involves the re-making by goldsmiths of old family ornaments into lighter or fashionable designs and the amount of gold
thus recycled is impossible to gauge. Estimates for this recycled
jewellery vary between 80 tons and 300 tons a year. GFMS estimates are that official gold bullion imports in 2001 were 654 tons. Exports
have increased dramatically since 1996, and in 2001 stood at over 60 tons. The US accounted for about one third of total official exports. Manufacturers located in Special Export Zones can import gold tax-free through various registered banks under an Export Replenishment scheme. 2) Industrial applications: Besides jewelry, gold has many applications in a variety of industries including aerospace, medicine, electronics and dentistry. The electronics industry needs gold for the manufacture equipment. of computers, unique telephones, televisions, and other Gold's properties provide superior electrical
conducting qualities and corrosion resistance, which are required in the manufacture of sophisticated electronic circuitry. In dentistry, gold alloys are popular because they are highly resistant to corrosion and tarnish. For this reason gold alloys are used for crowns, bridges, gold inlays, and partial debenture. 3) Governments and central banks: The third source of gold demand is governments and central banks that buy gold to increase their official reserves. Central banks holds 28,225.4 tons, the holdings of Reserve Bank of India are only a modest 397.5 tons.
4) Private investors:
Finally, there are private investors.
Depending upon market circumstances, the investment component of demand can vary substantially from year to year.
NEWS FROM THE DEMAND AND SUPPLY
The increase in investment demand is likely to offset the slowdown in demand for jewelry fabrication. World investment demand has more than doubled to over 600 tonnes in 2005. A recent report by GFMS said the investment demand for gold likely to continue until 2009 that could see global prices hitting new highs.GFMS expects jewelery demand that represents 72% of total gold demand to decline 352 tonnes to 1485 tons in the first half of 2007 On the supply side mine production is expected to increase 56 tonnes to1236 tonnes while gold scrap is expected to increase 52 tonnes to 451 Tonnes. The increase in demand is likely to see dips being utilized as buying opportunities, particularly as there have been no significant fresh discoveries of gold deposits. Most gold manufacturing of electrical components takes place in north America,wstern Europe and east asia. A significant factor that could see an increase in demand from east asia in increased number of companies shifting to the region due to the cost benefits on offers. Newer uses of gold include increased usage as an industrial metal,theYellow metal being increasinglylooked as a catalyst in fuel cells ,chemical processing and controlling pollution. Another avenue that could be focused upon is in the field of Nanotechnology gold nanorods can be used to improve LCD diplays in mobile phones and laptops. However gold futures continue to be vulnerable to sharp slides due to several factors.
GOLD DEMAND TRENDS
Third quarter 2009
Gold demand, in tonnage terms, rebounded strongly in Q3 after several quarters of weakness. Identifiable demand totalled 1,133.4 tons, up 170.1 tones (18%) on the levels of a year earlier. In US$ value terms, this represented a 51% rise to $31.8 billion, an all-time record high and a 45% leap from the previous record set in Q2. The recovery in demand was Triggered by a fall in the gold price, which coincided with sharply escalated levels of economic and financial uncertainty. • After briefly testing levels above US$950/oz early in the quarter, the gold price fell back, briefly touching levels under $750/oz in mid-September. Nevertheless, the average for the quarter, at $872/oz, was 28% higher than Q3 2007’s $680/oz. • The biggest contributor to the increase in total identifiable demand in Q3 was identifiable investment, up 137.5 tones (56%) relative to year-earlier levels. Jewellery demand rose 45.5 tones or 8%, while industrial and dental demand declined 11%.
The strong recovery in jewellery demand to a record quarterly value of over US$18 billion Reflected significantly higher demand in some countries, partly offset by sharply lower demand in others. In US dollar terms, demand in India surged by 65%, while the Middle East, Indonesia and China all enjoyed rises of more than 40%. At the other
extreme, the US and UK were down by 9% and 5% respectively (declines of more than 25% in tonnage terms). • Driving the improvement in identifiable investment was net retail investment, which rose 121% from 105.1 tons to 232.1 tones. Switzerland, Germany, India and the US enjoyed the biggest surge in demand, although shortages of bars and coins were reported among bullion dealers in many parts of the world. • Gold Exchange Traded Funds (ETFs) enjoyed a record net quarterly inflow of 150.0 tones, boosted by extreme levels of economic and financial uncertainty. The peak in inflows Occurred in the latter part of the September, triggered by the collapse of Lehman Brothers and a fear of banking sector collapses. Net inflows surged by an unprecedented 111.0 tones during 5 consecutive trading days, equivalent to US$7bln. • The strong rise in identifiable investment demand was offset by a significant outflow in the “inferred investment” category. Inferred investment is calculated as a statistical residual and is therefore subject to statistical uncertainty. It covers most institutional investment outside ETFs. Several key factors contributed to the large outflow, including gold’s inclusion in commodity indices; the recovery in the US dollar and unwinding of long gold/short dollar trades; and a round of selling by hedge funds that were forced to raise cash to fund significant Redemptions and margin calls i.e. the selling reflects gold’s better performance relative to other assets • The significant outflow in inferred investment explains why the gold price did not perform better during the quarter in the face of very strong jewellery buying and investment in ETFs and bars and coins. Notably, this category largely reflects investors with a shortterm focus. In contrast, the more fundamental, long-term sources of demand were very strong. • Industrial and dental demand declined 11% relative to year-earlier levels. Electronics, the largest component of industrial demand,
was hampered by the downturn in the global economy and a lack of confidence within world markets.
• Gold supply was down 10% on year-earlier levels, the biggest contributor being a significant reduction in official sector sales. For the year to September, sales by signatories to the Central Bank Gold Agreement totaled a provisional 357.0 tonnes, the lowest level of annual sales since the first agreement was signed in 1999.
Outlook for Q4 2009
The strong level of demand for jewellery, bars, coins and ETFs that was evident in Q3 appears to have continued into early Q4. ETF holdings broke record highs yet again in October, bar and coin shortages have continued and anecdotal reports suggest that India enjoyed buoyant sales during the mid-October Diwali festival. Offsetting these positive factors, though, is an outlook of continued weak jewellery demand in Europe and the US. Given the uncertainty that surrounds the global economy,gold’s safe haven appeal should continue, but so too will the possibility of heightened levels of activity in the speculative side of the gold market. While the commodity price related and margin call related selling appears to have abated, it is too soon to call an end to market volatility. The downward effect on total gold supply caused by de hedging is abating and this is set to continue. However, the effect on total supply is likely to be offset by other factors. In particular, net central bank sales should remain at subdued levels and the constraints on mine supply are unlikely to ease. The credit crisis will continue to affect both explorations Activity and potentially mine expansion, particularly among the smaller players
GOLD LONG TERM TREND
For the Gold, progress ultimately takes the form of five waves of a specific structure. Three of these waves, which are labeled 1, 3 and 5, actually effect the directional movement. They are separated by two countertrend interruptions, which are labeled 2 and 4, as shown in chart. The two interruptions are apparently a requisite for overall directional movement to occur. Motive mode is employed by both the five wave pattern on Gold chart and its same-directional components, i.e., waves 1, 3 and 5. Their structures are called "motive" because they powerfully impel the market. This is trend wave which is any wave that trends in the same direction as the wave of one larger degree of which it is a part.
As per chart fibonacci lines are drawn which is , the ratio of any number to the next higher is approximately .618 to 1 and to the next lower number approximately 1.618 to 1. The further along the sequence, the closer the ratio approaches phi (denoted f) which is an irrational number, .618034.... Between alternate numbers in the sequence, the ratio is approximately .382, whose inverse is 2.618. As per Elliotwave theory Prices are in the 5th wave which is motive th wave.To find the target of 5 wave we can combine elliotwave with fibonacci on 3 rd wave.
The length of 3 rd wave is Rs 4400
Rs 13000 – Rs 8600
The 3rd wave approximztly correct at Rs 11300 which is 38.2 % Rs 1700 5 th = Rs 17400 wave would be 11300 +
So the long term price target is Rs 17400
GOLD SHORT TERM TREND
As per gold chart shown prices are in the ‘bullish price channel’ and prices are near to the resistance line. Prices are touches high and open interests is negative which leads to positive divergence. The break above channel line resistance marked an acceleration of the advance. This might consider the Gold overextended after this move, but the advance was powerful and the trend never turned bearish. Once it croses the resistance line(Rs 15600) then the
immediate resistance at around Rs16000 ,which is channel width.For Short term 1st Resistance at Rs 15,600 /-
2nd Resistance at
Rs 16,000 /-
Indian Rupees Vs Gold Correlation between Gold and currencies
The US dollar and the gold price
Recall from last week that the PVE Gold Index consists of the GDPweighted gold price in thirty-six countries, including the United States. Since nine of the countries in the index use the euro, twenty-eight currencies are represented. For convenience, I copied last week’s chart below; let’s see what we can glean from it.
The PVE Gold Index gives us an idea of how the average gold price in the world is changing. When the gold price in any given currency deviates from the PVE Gold Index it implies a change in the exchange rate of that currency with respect to the other currencies in the index. We can therefore see that the US dollar exchange rate was relatively stable from January 1990 to the middle of 1992, when the dollar started to strengthen. We know the dollar strengthened because the gold price, in dollars, started to drop below the PVE Gold Index indicating that the dollar’s purchasing power was increasing. But why did the dollar strengthen? In 1992 the Brazilian real collapsed and capital in search of safety made its way, mainly, to the United States. The real was devalued to practically nothing; it was replaced by the new real on July 1, 1994. As
a result of the Brazilian currency crisis the demand for US dollars soaked up US currency that would otherwise have been used for settlement of international trade. The dollar, therefore, increased not only against the real, but against many other currencies as well. Between 1992 and 1994 the dollar increased by about ten percent against the other currencies in the PVE Gold Index. This increase in the dollar’s exchange rate on foreign currency markets is represented in the chart above by the decline in the US dollar gold price relative to the PVE Gold Index that started in 1992. The Brazilian real crisis was hardly behind us when, in 1995, the Mexican peso dropped more than fifty percent against the dollar. This was the worst financial crisis in Mexico since the Mexican Revolution. More capital flowed into the United States, competing for dollars on foreign exchange markets and keeping the dollar strong. Between 1995 and 1996 the Japanese yen lost about twenty-five percent against the dollar. More demand for dollars meant that the dollar continued to strengthen on foreign currency markets, further increasing the gap between the average, worldwide gold price and the US
dollar-gold price. Japan set the stage for the big one, the Southeast Asian currency crisis.
Between 1996 and 1997, the Indonesian rupiah dropped seventy-six percent; the South Korean won fell fifty-six percent and both the Malaysian ringgit and the Philippine peso lost forty percent of their value against the dollar. This was a financial catastrophe and its effect was felt across the globe. Since the US dollar was performing well on foreign currency markets, thanks to the Brazilian, Mexican and Japanese devaluations earlier in the decade, a tidal wave of capital made its way to the United States. Still shaken from the events of 1996 and 1997, Russia defaulted on its foreign debt in 1998, sending the ruble down seventy percent in just one year. In conjunction with the Southeast Asian crisis the mood is grim, and international capital pours into the US seeking refuge. The increase in the US dollar following the Southeast Asian currency crisis crushed the US dollar-gold price and was large enough to be evident in the PVE Gold Index. The US dollar represents twenty-eight percent of the Index and contributed to the Index’ decrease of more than twenty percent during 1996 and 1997. As you can see though, the US dollar-gold price declined much more and for much longer.
When the euro was launched in January 1999 it collapsed almost twenty-five percent, on average (PVE Euro Index), and about thirty-five percent against the dollar. As if this was not enough, the Argentine peso had trouble in 1998; in 2000 it was the Turkish lira and in 2002 it was back to Brazil for another round. As an aside, all the currency devaluations mentioned are examples of how the dollar’s exchange rate affects the US dollar-gold price. Even though the world is currently fascinated by the euro’s exchange rate as a leading indicator for the US dollar gold price we cannot ignore the impact of other currencies. Collectively, they could be more important. The compounding effect of capital flight during all these currency crises can be seen in the increasing deviation between the US dollar gold price and the PVE Gold Index. The index is currently more than sixty percent higher than it was in 1990 while the US dollar-gold price has only recently recovered to its January 1990 level. The dollar’s strength stemmed from the weakness in other currencies. It had very little to do with America’s productivity, or a “New Era”. Because most major currencies in the world had already devalued against the dollar it was obvious that the dollar could not continue to increase indefinitely. A PVE Dollar Index, using the same GDP-weighted currency data as for the PVE Gold Index, shows that the US dollar gained 112% from January 1990 to February 2002 (its peak) and has since declined by fourteen percent. We have seen that the decline in the US dollar-gold price, and its under-performance relative to the rest of the world, is a reflection of the US dollar’s exchange rate. It is my belief that the US dollar gold price will again catch up with the PVE Gold Index as a result of continued weakness in the dollar to correct America’s enormous trade deficit. This correction of the dollar has only just begun and is likely to increase the US dollar-gold price by approximately thirty-five to forty percent more than the concurrent average increase in the gold price in other currencies.
As the Rupee start strengthening Gold prices start strengthening. As per charts the data we analyze from Sept 2008 to Feb 2009. From Oct middle onwards the rupee starts weakening and the gold is almost all flat but on Nov middle onwards when the rupee starts strengthen up Gold is also starts rises. The means Gold prices are correlated to Ind vs. Dollar currency.
CHAPTER - 7
FINDINGS AND SUGGESTIONS
1. The forward Market Commission should be measure and take steps to create awareness among the traders about the commodity exchanges and their working. 2. The Government is better advised to give investors the options derivative contracts in the commodity market like in the equity markets. 3. The factors other than the economic factors such as the geo political circumstances have to be tracked constantly. 4. In case of Gold US dollar rate is of great significance and thus the US dollar rate has to be tracked constantly 1. Forward market Commission needs to re-look at its margin payment policy and make it more investor friendly so that more and more people are encouraged to invest in commodities market. 2. Banks, FII’s and Mutual funds should be allowed to invest in commodities market as part of their portfolio. This will be shot in the arm for the growth of the commodities market in India. 3. The investor in the commodity market should take decision based on in depth analysis of the particular commodity in scientific manner rather than the market rumors and gimmicks. 4. All social, economic and political factors have to be taken in to considerations apart from the demand and supply scenario before trading in commodities. 5. Forward Market commission should initiate measure so that some of the major regional commodity exchanges can be improved and brought up as the national level commodity exchanges. 6. The members of the commodity exchanges must set up research wings in order to give constructive advise its clients based on reason rather than the clients depending upon rumors and gimmicks in the market. 7. Regulator should bring out policies which are more investor friendly so that investors come to the exchanges to trade more in commodities and feed back with all the player of the commodities market.
8. All exchanges should follow uniform norms as regard to margining system, delivery mechanism and collateral mechanism. 9. Tax uniniformity and simplification to facilitate easier delivery of goods. Creation of physical infrastructure to facilitate the same. 10. Commodities trading should be treated on par with equities. The income generated from commodity trading should be treated as capital gain rather than as income from business and profession as the later attracts higher rates of taxation than the former. 11. Mutual funds must be permitted to launch commodity schemes so that small investors can reap the benefits of diversification with in the arena commodities.
CHAPTER - 8
RECOMONDATI ONS AND CONCLUSIONS
For Short Term: (2 to 4 weeks) Buy Gold (Mcx) above 14600 levels with stop loss of 14200 for Target 16000. Buy gold above Stop loss 1st resistance 2nd resistance 1st support 2nd Support Rs14600 Rs14200 Rs15200 Rs16000 Rs14200 Rs14000
For Long Term: ( 1 month to 6 months) Buy Gold at current levels (14100) with s/l of 13000 for Target of Rs17400 Buy Gold at Stop loss 1st resistance Rs 15100 Rs 15000 Rs 16000
2nd Resistance Rs 17400 1st Support 2nd Support Rs 14600 Rs 14000
1.Commodities market, contrary to the benefits of the many people has been existence in India through the ages, However , the government permission t set up national level commodity exchanges has indeed comes as a shot in the arm. 2. Price movements are more predictable, purely based on demand on and supply of that particular commodity unlike the equity markets and bond markets which are based on different types of financial data like actions of different central banks on interest rates , quarterly rates of companies , and sales of companies and so on. To that extent, price risk is reduced in commodity market. 3. Contrary to the myth, that the volume of the commodity markets is very low the volumes of commodity market in India are likely to touch 16 lakh corers in 2009 according to the estimates of forward commission. 4. Through both futures and options derivatives contracts are available in world commodity markets, but in India options contracts have not been permitted by the government. 5. Commodites prices are less volatile when compared to the stock and bond markets. Thus it is relatively safer to trade in commodities, however all investments are subject to markets risk and commodity market risk and commodity futures are not different. 6. Another conclusion is that the farmers and traders are not fully aware of the existence of the commodity exchanges in India. 7. In commodity markets though there is a possibility of physical delivery of the contracts are squared off well before the expiry of the contract. 8. Most of the trading that takes places in the commodity markets takes place in the nearest month contract rather than the far month contract.
9. In commodity markets as there is a possibility of delivery, there arises the requirement of warehouse facility which is not required in case of equity markets. 10. The initial margin payment and its very rigid and strict implementation though necessary have found some times discouraging investors from investing in commodity markets. 11. Though volumes are huge in commodity market, these volumes are mostly in precious metals like Gold and Silver. 12. Most of the trading now taking place in the commodities is being done by the speculators only traders are not fully aware of the commodities market. 13. As the commodities market are working virtually round the clock, any drastic news is digested by the market which is not so with equity market like the September incident when equity markets all over the world opened far down the next day morning and the investors were left hanging. 14. Most of the trading takes place I the commodities market is of intraday nature and thus mist of the traders are offset day only. 15. The future market contracts available on a wide spectrum of commodities like Gold and Silver provide excellent opportunities for hedging risk for importers, traders and large-scale consumers. 16. The price movements of certain commodities like Gold , Silver, Natural and crude oil are not only dependant on the demand and supply but also depends on a host of social, political and economic circumstances. 17. The prices of the Gold and Silver are subject to variety of reasons such as US Dollar rates , festival demand in India and other geo political circumstances. 18. Inspite of the high prices on Gold the demand for these commodities is still bullish and remained so in the recent months also. 19. Gold is treated as most secured and is safe haven buy for investor as the world is surrounded by geopolitical tensions, energy prices and instability in currency rates. 20. Long-term outlook of Gold remain bullish even at this point of high price and will invite significant buying interest at every lower levels. Every correction on lower side of the market is expected to
invite significant buying interest.
CHAPTER - 9
BOOKS: • • • • • Investment management -V.K.Bhalla Investment management -Preethi Singh Security Analysis And Portfolio Management -V.A.Avadhani Marketing of Financial Services -V.A.Avadhani Indian Financial System -M.Y.Khan WEBSITES:
• • • • • • • •
www.GEOJIT FINANCIAL SERVICES Ltd..com www.bseindia.com www.sebi.com www.moneycontrol.com www.economictimes.com www.nseindia.com www..icicidirect.com www.indiabulls.com
NCFM MODULE FOR COMMODITY MARKET
NEWS PAPERS: Business Standard Business Line