Gold Price Target Rs 4625 per gram By The End Of The Decade - CLSA

CLSA

Gold: Taking Off, End Of Decade Target $ 3700 an Ounce maintained

Christopher Wood, Dr. Jim Walker

Gold exhibiting little of its own characteristics in the past 2 years, moving in one direction just like any other commodity. But things are ready to change as debased currencies, dwindling Gold Supplies, unwinding of Gold Futures by Gold miners, low to negative interest rates, rising inflation and falling Stocks and Bonds force investors to shift as much as a fourth of their savings into Gold.

Buy Gold. As a panic stricken Ben demonstrated last night, the Central Bank has no answer to the problems they have created over the last 5 years but to debase their paper currencies even more. The yellow metal is the safest store of value we can all own.

The growing evidence of slowing growth is also why it is wrong to be increasing equity weightings and reducing bond allocations as a result of applying Fed model methodology. The current environment of falling bond yields and rising credit spreads is negative for equities as it is deflationary market action.

A long only asset portfolio for US dollar pension funds now includes 15 per cent in Unhedged Gold-Mining stocks and 10 per cent in Gold Bullion.

Gold Price Target By The End Of The Decade Maintained at $ 3700 per ounce equivalent to roughly Rs 4625 per gram, against the current MCX Gold at Rs 1225 per gram.