Conditions for Gold – never so Perfect

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Harsh Goela

18.12.2016

The U.S. dollar is insanely overvalued right now. And there’s absolutely no way these levels can be sustained for much longer.

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The strength of the Dollar over the past several months has been based on nothing more than foreign currency conversion into Dollars.

  • China and Japan competitively devaluing their currencies
  • Yuan and yen holders converted to USD.
  • Following Brexit, Pound converted to USD.
  • Currency demonetization in India, Rupee got converted to USD.

Right now, the Dollar  is seeing strength on speculation of more interest rate hikes from the Fed  in the coming 2017.

After  rate hike 15.12.2016, the Fed said it was hoping to increase rates four times next year. The dollar shot up. However, they seem to forget that the Fed said the same  thing this time last year; they were planning to increase rates four times in 2016. That didn’t happen.

So the Dollar  is flying high right now on both fears of other currencies and hopes of a better U.S. bond market due to increasing in interest rates. But it won’t last long. And you need to own gold.

Another major trigger for Gold is the  global shift to cashless economies.  As physical paper cash is phased out, physical  assets like gold will be at a premium.

U.S. debt is now close  $ 20 trillion and Donald Trump plans to add to it with his ” Spend and Invest and reduce taxes” This could end in a Debt Bubble getting burst and making economic conditions even more uncertain.

Gold is money, a store of wealth and a hedge against  against  inflation. Gold  is a screaming buy today at $1,137 an ounce and  Rs 2,710 per gram in India.

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