Interesting shift: Why your family jeweller is losing the battle to big brands

The shift in buying behaviour stems from better resale value of old ornaments and improved transparency in transactions following the implementation of the goods and services tax (GST) in July 2017.

Organised retail chains' voluntarily adoption of mandatory hallmarking of gold ornaments has helped them gain consumers' trust -- a major driver for jewellery purchase -- over the past one year.

Assured resale value and continuous offer of discounts on making charges have also seen customers shift to branded retail stores from their perennial local jewellers.

Read more at http://www.rediff.com/business/report/why-your-family-jeweller-is-losing-the-battle-to-big-brands/20180707.htm

My notes: TITAN is the biggest beneficiary of this move. 

GOLD 10 year CAGR in USD/oz

Your CAGR is (1346/700)^(1/10)-1=0.07or 7%

Investing in FDs would have given similar or better returns.

How to calculate CAGR? Read this link

GOLD technicals

- trend is down on weekly charts
- sustaining above 30000 will be bullish
- support 28000

Your gold may be tungsten and not gold.

Credit: http://alphaideas.in/2017/01/06/gold-may-tungsten/

GOLD MCX charts

Trend is down on daily and weekly charts... no visually obvious support visible.

GOLD USD charts

Trend is down on daily and weekly charts... no visually obvious support visible.

Comparative GOLD chart in INR and USD

Source: http://alphaideas.in/2016/12/20/tale-two-gold-prices/

GOLD USD charts

Buying emerging at lower levels...

MCX GOLD trend still down

GOLD USD charts

- trend is still down
- now trading below APR- JUN supports

Will gold coins overtake currency notes?

Gold coins will overtake currency notes in financing large black deals. This will hugely increase the demand for imported gold, causing balance of payments strains.

A 5g gold coin today is worth roughly Rs 15,000, and a 10g coin roughly Rs 30,000. So, a briefcase of gold coins will hold several crores, far more than a briefcase of Rs 2,000 notes. Portability and space reduction make gold more convenient for large deals. Bribes are often a percentage of project costs, and as the economy and projects grow bigger, kickbacks will too. Large payments will be done most conveniently in gold or dollars.

Gold is usable anywhere in the world. Not being paper, it can never be demonetised. Cash keeps losing real value because of inflation, but gold prices rise faster than inflation in the long run. If rising demand for gold induces the government to raise the import duty, domestic prices will rise correspondingly, giving a windfall to gold holders.

The value of gold fluctuates daily, creating valuation risks for hoarders. However, holding cash is not riskless either because it depreciates with inflation. Cash only depreciates, whereas gold coins can both depreciate and appreciate, mostly the latter. That’s why the future of black is gold.

Many naïve folk think demonetisation will deal a body blow to black money and shift India towards a clean, cashless economy. Sorry, but the benefits will be limited. Black money is both a stock (that is, a hoard of past untaxed money) and a flow (the constant generation of fresh untaxed income).

- by TraderintheZone

MCX GOLD weekly charts

Weekly charts are showing trend reversal. Next support is around 28000 and then 25000.

GOLD - previous support to now offer stiff resistance?

GOLD weekly charts

- trend is down on weekly charts
- next support 1200

MCX GOLD chart

- trend is up
- previous resistance 30500 now offering support

GOLDBEES 5 year weekly chart

Druckenmiller: Get out of the stock market, own gold

Legendary billionaire investor Stanley Druckenmiller told Sohn Investment Conference attendees to sell their equity holdings Wednesday.

"The conference wants a specific recommendation from me. I guess 'Get out of the stock market' isn't clear enough," said Druckenmiller from the conference stage in New York. Gold "remains our largest currency allocation."

The billionaire investor expressed skepticism about the current investment environment due to Federal Reserve's easy monetary policy and a slowing Chinese economy.

"The Fed has borrowed from future consumption more than ever before. It is the least data dependent Fed in history. This is is the longest deviation from historical norms in terms of Fed dovishness than I have ever seen in my career," Druckenmiller said. "This kind of myopia causes reckless behavior."

Read more at http://www.cnbc.com/2016/05/04/druckenmiller-get-out-of-the-stock-market-own-gold.html

Baba Ramdev idea under serious consideration in America

Baba Ramdev made big news with one idea when Anna agitation was at peak:

The idea: Withdraw all big currency notes because lots of business transactions are done in cash to evade taxes. But his idea was rejected because it came from a Baba.

You can read the entire article here

The argument is simple: High denomination note is a boon to corruption and crime. Lawrence Summers solution: "a global agreement to stop issuing notes worth more than say $50 or $100". This is being hailed by many as next big disruptive idea which will destroy the business models of tax evaders, criminals and terrorists. It will also end high-value bribes.

Interestingly Baba Ramdev made the same argument 2-3 yrs back. Now, I am sure even people in India will debate this because it comes from Harvard professor and former Treasury Secretary. People in India run down our own people because we consider people who cannot speak good English as low IQ people. Common sense has nothing to do with language. But unfortunately, our colonial minds will never come out of this closed mindset.

Read more/ source: State of the Market - is this the reason why Gold is rallying?

GOLD charts USD multiple timeframe

3 year weekly  charts
- bigger trend is down
- within this, short term trend has turned up
- support 1150 resistance 1300

Your Personal Gold Standard

An excellent article why gold and money is the same thing and why prices rise or fall

>>>
...
Gold is the same. It has no yield. An ounce of gold today will be an ounce of gold next year and the year after that. It will not mysteriously turn into two ounces. It will not rust or change shape or color. It is just gold. Yet it is money.

It’s true that the value of gold may change when measured in dollars. It is also true that the value of a dollar may change when measured in euros or ounces of gold. But these changes in relative value do not turn these units into investments; they just reflect supply and demand for different forms of money.

There isn’t a central bank in the world that wants to go back to a gold standard. But that’s not the point. The point is whether they will have to.

...

It’s like putting a thermometer in a patient, getting a 104-degree temperature and blaming the thermometer. The thermometer’s not to blame; it’s just telling you what’s going on. Likewise, the price of gold is not an economic object or aim in itself; it’s a price signal. It tells you what’s going on in the economy. And gold at the levels I’m talking about would mean that you’ve now verged into hyperinflation, or something close to it, because nothing happens in isolation.

....

But if there’s a run on paper currencies (which is entirely possible) and there’s borderline hyperinflation (which is entirely possible), they may have to go to a gold standard… Not because they want to, but because they find it necessary to calm the markets.

I suggest you buy your gold at current levels — around $1,244 — and ride the wave up to these much higher levels ($4,000-5,000 an ounce) and then assess the situation. Be nimble.

Read complete article at http://dailyreckoning.com/your-personal-gold-standard-2