Gold should not be seen as a strategic asset but as a tactical asset and investors should not fall in love with it. It is not necessarily a good long-term store of wealth.
PERTH: Investors should see gold as a tactical asset and not fall in love with it, according to Satyajit Das,famed economist, derivatives expert and author of Extreme Money and director of Oscar award winning documentary 'Inside Job'.
In an interview to Daniela Cambone of Kitco News, he said: "Gold is a very interesting commodity and should be approched tactically," according to Satyajit Das. Regarding US QE measures, he said that QE would last for every because of a strategically wrong decision it has taken. To bring new economic activity worth $300 bn a year, it si putt in $1.6 trillion worth new money but the labour participation rate or economy's strength hasn't gained in real terms.
“Realistically, the economy is not that strong,” Das says. 'We will be in QE forever." With regards to gold, Das says that investors need to look at it as a tactical asset instead of a strategic asset. “I don’t think it is necessarily a good long-term store of wealth,” Das added. “Never love a stock because it won’t love you back and I think gold is exactly the same."
Gold market update
US Gold futures has risen to $1320.7 on electronic trading at Comex on Monday while delayed US Fed stimulus tapering is positive for the yellow metal, sluggish physical demand amidst festival season in India and fall in gold ETF holdings putting downward pressure.
According to a recent CME Group report " Basically the gold market has settled into a consolidation zone bound by $1,315 and $1,325 and that wasn't surprising considering the big upward adjustment in prices yesterday. Surprisingly gold hasn't been able to add to this week's gains despite a fresh downside breakout in the Dollar and action in the US Treasury market that would seem to suggest that the Fed is indeed going to remain supportive for the foreseeable future. Talk of rising UK gold exports to Switzerland in the face of an exodus from ETF instruments might suggest a shift in investor habits, instead of a sign that overall interest in gold type instruments is waning. In the afternoon trade, the gold market might see an important pivot point at a key low this morning of $1,312.80 but the action in the equity markets this afternoon might increase its influence on gold into the Friday close."
courtesy of bullionstreet
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