Gold - Technical Analysis

"Somebody born in 1978, imagine their parents if bought gold for them must have recovered the investment as of today! Ha Ha!"

I do not think that will be the case. As long as I remember, Gold has never been this high, it might be due to exchange rate effect.
 

Alchemist

Administrator
Staff member
I do not think that will be the case. As long as I remember, Gold has never been this high, it might be due to exchange rate effect.
He is talking about gold price in USD.

Gold price in INR was much lower at that time. The 1980 peak was somewhere around Rs 1600 per 10 grams.
 

man4urheart

Well-known member
"Somebody born in 1978, imagine their parents if bought gold for them must have recovered the investment as of today! Ha Ha!"

I do not think that will be the case. As long as I remember, Gold has never been this high, it might be due to exchange rate effect.
The chart is in dollars!

USD - INR rate in 1980 was 8 RS! and today it is 45! :congrats:

Well this all opened up in 1991, so before that you have to discount all the rigging, which led to almost India bankruptcy in 1991!

I don't have long term charts in Rupees!
 

Alchemist

Administrator
Staff member
I have corrected by earlier post.

The 1980 peak was somewhere around Rs 1600 per 10 grams.

A basic 30-year chart for gold in INR can be found here:

Gold Price India

See the chart at the bottom. The chart shows price of gold in Rupees per troy ounce.
 
50% return in 5 years ?

I have corrected by earlier post.

The 1980 peak was somewhere around Rs 1600 per 10 grams.

A basic 30-year chart for gold in INR can be found here:

Gold Price India

See the chart at the bottom. The chart shows price of gold in Rupees per troy ounce.
Thanks for the analysis friends. As per this 30 year graph, looks like gold is the only commodity which has positive graph all these years without major negative slopes. So in a 5 year horizon, probably we can make 50% of returns? Is this a reasonable assumption?
 

Alchemist

Administrator
Staff member
Thanks for the analysis friends. As per this 30 year graph, looks like gold is the only commodity which has positive graph all these years without major negative slopes. So in a 5 year horizon, probably we can make 50% of returns? Is this a reasonable assumption?
"Past performance is not indicative of future returns".

Long-term performance of gold will depend on how fast paper money will lose its value.

If you belong to the group of people who has lot of faith in his own currency and other currencies of the world, gold is an investment to avoid.

If you belong to the group of people who think it's just a matter of time before budget deficits and high borrowing costs force governments to run their printing presses overtime, you have no better investment than gold.

I belong to the second group.

I don't know when exactly the fiat money bubble will burst, but I think it will before 2025 and gold will be multibagger even from current levels.

The price appreciation won't be a one-way move.

There will be intermediate corrections, some of which may last a few months or even years.

I think gold is ripe for an intermediate correction now and it may lose around 25% of its value in the next year or so.

If you want to invest, invest a little every month for the next 12-18 months.
 
Thanks for the analysis friends. As per this 30 year graph, looks like gold is the only commodity which has positive graph all these years without major negative slopes. So in a 5 year horizon, probably we can make 50% of returns? Is this a reasonable assumption?
Alchemist thanks for the link. I have 2 observations:

1] For the period 1973 till 2011 the returns from gold as an asset class is 14% (CAGR) plus less volatility makes them look impressive.

The second is certainly an eye-opener

2] Compare the returns from 1993 till date for Gold and Sensex.

Gold; Sensex

1993 - 10,000 per troy oz; 3346 (close)
2011 - 67,000 per troy oz; 18725 (close for the day)

Returns - 6.7 times for gold and 5.67 times for Sensex.

Even 2005 till date: 6 years shows gold returning higher vs equities.

(Probably that is the reason our grandparents put money in gold and avoided equities)
 
Post the developments since the last post the prices of Gold are higher to Rs. 94,000 / troy Oz and sensex (broad markets) down to 15,400.

This certainly calls for more investments in Gold going forward. rather than only 5 or 10% as advised by TV experts.

Does gold deserve to 30 to 40% weightage? Please comment.

Alchemist thanks for the link. I have 2 observations:

2] Compare the returns from 1993 till date for Gold and Sensex.

Gold; Sensex

1993 - 10,000 per troy oz; 3346 (close)
2011 - 67,000 per troy oz; 18725 (close for the day)

Returns - 6.7 times for gold and 5.67 times for Sensex.

Even 2005 till date: 6 years shows gold returning higher vs equities.

(Probably that is the reason our grandparents put money in gold and avoided equities)
:smokin:
 

Atiker

Active member
GOLD in INR ?

Agree GOLD prices in INR are a play between international Gold Prices and INR/Dollar Exchange rate.

Even if international gold prices don't go up, if INR depreciates further gold prices in rupees will go up.

Gurus, what do the Technicals say for GOLD ?
 
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