Gold Gleams, Knowing the unknowable/s of financial market.

Surat, 27-Dec-2020,

Some knowledgeable precious metal aficionados say Gold will historical bull run in 2021, I thought why shouldn't have an opine to this. Apart from the evidence coming from correlations and causations with other asset classes, investor's behavioral psychology tends softer towards the asset classification, while gold gleams remain the best of bull out of all other asset players, don’t run your pigs to the Bitcoin (I call it unclassified the asset of the 21^st century)

A Gold Gleams Year Ahead, likely to jump to $2600 to $2800 or 70,000₹ to 75,000₹ in next few years. Global financial debasement, bigger than any other in history, bigger than ever we may witness. A recurring theme of currency debasement once every 50 years.

Global M2 (Money except for reserves) ÷ by global GDP = >110% +, by last 100 years, it is typically between 30% to 50%. The present ratio is at its highest it has ever been in world history. We are on the verge of a global phenomenon = inflation via debasement! Govt credit has risen at a much faster pace than any time in recent history. That's why you see such large doses of Quantitative Easing-QE  is needed to push demand just a big especially after 2008. Other hand households and corporates are deleveraging. This is a massive debasement, positive for Gold Bull Run. 

Gold priced in the growth of fiat currencies indicates Gold is cheaper, cheaper than it should be what we believe. Gold prices adjusted for inflation has been higher. This keeps the US $ softer or weaker & propel Gold higher.  An upcoming Dollar bounce might allow Gold to be bought at lower levels, presenting an opportunity for augmented returns. Other hand Debt markets (Long term Bond yield still to be attractive than the short term 3 and 5 years) are representative of ripe conditions for a stable Bull Run for Gold.

Gold Price Without Inflation Adjusted

Gold Price With Inflation Adjusted

Understand this gold gleams with its relations to the Inflation and interest rate.

I augur this in very plain words, when inflation rises, the value of the currency goes down and therefore people tend to hold money in the form of gold. So, in times when inflation remains high over a longer period, gold becomes a weapon to hedge against inflationary conditions. This pushes gold prices higher in the inflationary period. Anyways, Gold Gleams often fear inflation and believes that gold will generally increase in price when inflation is high. But the correlation is not as simple as it fits this jigsaw. It seems like the inflation-adjusted price of gold would be virtually flat. Anyways irrelatively performed, as usual, the theory suggests.

Remember Gold is an Economic Crisis Hedge not an Inflation Hedge, and avoid such Inflation Hedge.

Weak dollar unstride the Gold bulls. If it allow the pig can fly too!

Look at the Indian ₹, It will balance the flows of fund, as of FII doppelganger to the Big Bull!

— 𝔻𝕖𝕤𝕒𝕚 (@iJigneshDesai) December 17, 2020

 **Disclaimer- Views are purely personal, it does not instigate anyone to invest in any speculate assets or misguided all or any other.

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