January 12, 2009 1:53 PM
I believe, we all wished that New Year start on Good note and even end with a good note. But as said, time and tide wait for none, things happen when they are due, unraveling from emotions, wishes and feelings.
We had fierce Israel attacks on Palestine , weak and gloomy economic reports for 2009 and in India a big time corporate scandal of Satyam Computers. These all events have fueled dismal outlook to become worse as we progress further in
I read many reports forecasting outlook : 2009.
Let me share with you some common forecasts for 2009.
- weak dollar- weak against precious metals. You may see $ maintaining its level against major currencies since all are in same boat of zeroing interest rates, stimulating economy and to do what ever it takes to fuel the purchasing power of consumer. But since production of precious metals have not been increasing with the pace the money is being pumped in the economies world across it will lead to higher prices of precious metals, in particular Gold.
- rally in first quarter across the markets as markets are extremely oversold and need relief rally
- precious metals will shine again in 2009 as real returns turns negative and dollar devaluation against precious metals
- consensus is gaining that this is a real global economic crisis, we will have –ve growth in US, UK and Europe . Emerging Asian economies will continue posting around 5% GDP growth, mainly India and China
- We also have started hearing on Oil prices. A crude price around $40 is not sustainable. For Oil producing industry, current price is not justifying the production cost.. For deep ocean exploration site, oil extraction cost is as high as $80 per barrel. We may see sharp upward revision in oil prices.
I believe, this year Gold should shine again. I have few more reports confirming my views. Attached are the reports of CLSA – Asia ’s largest and biggest research house, and Credit Suisse. In their 2009 forecasts, both research houses have unequivocally confirmed higher Gold prices. CLSA has forecasted $ 3360 price of Gold by end of 2010. Current price is $850. Almost 400 % absolute returns in 2 years.
We have Jim Rogers, Marc Faber, CLSA, Credit Suisse, World Gold Council, UBS, and do not forget those 60 economists whose reports I had sent earlier, all these eminent investors, research houses are bullish on Gold. Interesting outcome, consensus target for Gold is now touching to $ 3000 from earlier $ 2250.
I strongly believe, for my investors this year is going to be highly rewarding. Better than even 2008.
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