Friday, October 15, 2010

Gold correction is buying opportunity for investors------Shan Saeed


I firmly believe that equities are ready to drop into October-November and then rally again towards the end of the year. Historically speaking

The scenario is very much on the wall. The Fed will start printing money again and that would create a negative sentiment driving markets down. They don’t however see a threat to the March 2009 lows.

"Maybe the stock market won’t be very happy about additional stimulus, more interventions into the free market. Though anything could happen, but let’s put it this way that I do not think that we will go and breakdown below the March 2009 level".

I could see a downside target of no more than 950 on the S&P on the pullback. Any break below 1,000 will rattle the Fed. Ben bernanke is under pressure from all quarters......, But Chairman Ben Bernanke will allow further market declines once 1,000 is reached. US is so full of debt, stuck in a period of slow growth and high unemployment, that the Federal Reserve will soon have to revert to crisis era policies.

I am absolutely convinced the Fed will aggressively market the importance of QE and massively so". The US economy is not robust". Not buying into the good news brigade of commentators who believe the worst is behind us and the US economy is on the mend. We have mixed signals, but in general the economy is still weak".


There could be a significant correction in gold and other commodities as the dollar changes course. However any large decline would represent a buying opportunity.

The governments of every developed economy, including the US, the UK and Western Europe, will eventually default on their sovereign debts, so the one thing he will never do in his life is 'sell my gold.

The reason is very simple. Gold is not a liability of someone else, you really own it, you keep it in a safe deposit box, its quantity can not be increased at the same rate as you can print money which will eventually again weaken the US dollar. I am not saying that the dollar will go straight down, but eventually the purchasing power of money will lose."


The US dollar is extremely oversold and investor sentiment is very bearish. As a contrarian, I would not be short the dollar right now. This is buying opportunity for some smart, sharp and savvy investors.

Treasuries may become worthless

Mark my word. US Treasuries may become worthless as central banks, led by the Federal Reserve, print money in an effort to boost economies.

“Over the next 10 years, we won’t see any restrictive monetary policy anymore and no real interest rates above zero. Accommodative interest rates ambiance will continue.
Bond yields will “rise massively going forward..........

Disclaimer: This is just a research piece and not an investment advice...Every investment carries risk and return..Please execute your own due diligence before making any investment strategy or decision...

1 comment:

  1. Its a good research and help one alot in there decision making and taking investment action.