Thread by @banyanfa

For the precious metal lovers out there. For ages, #gold has been considered as safe haeven investment option. In times of uncertainty, where trust is lost in most of the asset classes, Gold is considered as the only trust worthy option. In itself, it has no value, but .. (1/n)

Perceived value. You would have heard it - beauty lies in the eyes of the beholder. Same is with Gold. Banks, Govts, Hedge Funds and Investors all end up being in a gold buying frenzy when uncertain time comes in.. (2/n).

Back in 2012, I wrote this blog note on Gold. It is a reasonably researched post where I detailed upon what impacts Gold prices - both from demand and supply. It still has stood the test of time, except values hv changed
..(3/n)
insight.banyanfa.com/golden-path-of…

Just today read a news article that #COVID19 #vaccines has been launched by Russia and Putin's daughter has already taken the jab. If that is true and if the vaccinee is even half close to perfection, the key driver behind uncertainity will vanish quickly .. (4/n)

What happens post that ? If there is no uncertainity, the same investor who took shelter of Gold / Silver, will dump it and move towards normalcy. When that happens .. Gold doesn't have a lot of demand other than for gradual consumption or storage of wealth for uncertainty..(5/n)

And the moment the buying stops, and even a dosage of selling starts, there won't be a shelter for 'pented' demand consumption at such an emotionally and perceived expensive levels. next steps - #Gold/ #Silver will come crashing down.. (6/n)

Gold is down right now at around 2%, and silver at around 5%.

But if the vaccine doesn't work - we are back to the Gold / Silver frenzy. Happy and sane investing !

I would rather stay disciplined to my #assetallocation and avoid anything in excess.