Good morning to all my readers. I am really very sorry that I did not have my article last week, as I was at the Gold convention at Goa. The scene at the conference was bullish, bullish and more bullish…so they would simply love to see the gold prices to rise with not even the clouds in sight. I mean, does something have an end to it?? The claims were simply unbelievable…$1000 to start with then $ 1200 and then $1500. I must say that with such prices we are talking like that we would be consuming all the gold in the world...and even eat and drink gold... As I hade mentioned in my previous articles that the major driver of gold prices in India is the rural market. If the farmers do not make money from the crops that they have sown, they won’t come in the market and buy gold as they have already lost their money in sowing their crops twice or thrice. I bet that many of the readers are farmers themselves so they will be the right people to give me this answer.
The presentations were decent enough with analyst from all over predicting the prices to reach sky high and the analysis were unique in their own sense. There was a presentation that said that in all the odd years in the month of September gold prices were at their peak highs but what surprised me is that the time period was limited to only to 5 years. What about the period before 5 years. If the analysis has to be made then at least a historical view of 10-15 years should be taken into consideration. All I would definitely say, that if you are trading gold, whether long or short side of it, make sure that you book your profits at regular intervals rather than holding the position for a long time. And I hate to say this but long time means only a day or two. Because gold is such a commodity that it will show the investor the sky with its price but will also pull the carpet below the feet at the same time.
Another commodity that is still the fancy of most of the investors- natural gas is showing some signs of recovery. Now I am really very sorry about the investors loosing their money in their natural gas trades and I tried my level best in helping them by setting up stop losses that could have saved them from huge losses that they have already made. Now that the prices are up for the time being, I still wont be comfortable to trade in it. If you tell me that I am scared of trading natural gas then I won’t deny that fact, because natural gas is a risky commodity and I do not rely on my luck to try to make money in it if I am not convinced with my analysis. Natural gas is still in wait and watch situation and now is not the right time to pull out your swords and rush into buying. Wait for the clear signals to come in and let the charts speak for themselves then it will be the right time to enter into it. There are investors who call me that they see an opportunity in natural gas because the price gap between every contract month is more that Rs. 50. If that is the case then there are so many commodities that have price gaps in their contract months then why are their prices falling? Natural gas is an internationally traded commodity which has global presence like crude. Is anyone aware of the fact that there is a country (I do not wish to name the country in this article for some reasons) that produces natural gas and has a cost of $0.90 per mmbtu? Now even if the prices of natural gas in the international market is around $3.233 per mmbtu then why would that country be bothered to have high prices where it is already making more than 3 times its cost? Now I guess it is time for you to think that why the prices of natural gas has come down so drastically. I do not wish to put forward the reason why the market expected the prices of natural gas to go up, because there is a reason to it and I know it very well. All I will say that it was simply a guess work that if such and such even would have occurred then the prices of natural gas would have gone up.
There are chances that the prices of most of the commodities would take unexpected turns around 15th September. It is a possibility and my analysis is based on lots of factors and any one not in favor then it may not even happen. So I would only say to my investor to please be careful with your positions and if you see any unusual movements in the prices during that time try not to hold the position for long. Happy trading week to everyone…
