Special Report- Gold

The recent sell off for the precious metal was a combination of a disappointing Chinese growth economic data and the Eurozone’s crisis. Selloff was further sparked by concerns, that not only Cyprus who is looking to sell a vast amount of gold to raise funds, but also other European governments may also have to follow this pursuit. Goldman Sachs and BlackRock Inc. both called this selloff as a panic event.

What are Pros saying about the recent selloff?
Jim Rogers, who made most of his fortune by betting on commodities, told Bloomberg today that the recent sell off for gold was a selling climax for the precious metal. He also added that gold was due for a correction which took place in the last few days, and he may start buying gold around these levels.

Carley Garner, the co-founder of DeCarley Trading, and the author of A Trader's First Book on Commodities, said that gold bulls may have the last laugh. She also added that the RSI has dipped below the 30 level which is not only an oversold signal, but also this is the first time gold has gone in this territory since well before the financial crisis.

Bargain Price Call for Demand
The world’s largest consumer of Gold, India, started buying physical gold after this worst sell off in almost 30 years. Gitanjali Gems Ltd., which is the biggest retailer of jewellery and diamonds by sales, doubled their gold purchase yesterday.

Exchange Traded Funds
Shinning metal held in exchange traded funds fell for an 11th day to 2,377.8 metric tons, according to the data compiled by the Bloomberg. According to Massachusetts based EPFR global, gold funds experienced net outflows of $11.25 billion by April 10.

Uncertainties still remain in the Global market
The International monetary fund shaved its global growth forecast yesterday to 3.3% from 3.5% in January. The US payroll economic data for March grew the least in nine months and the second biggest economy of the world, China, is also suffering the weakest growth in two decades, which is below 8%. Moreover, the European unemployment for the 17 nations is at its record high of 12%.

Biggest Losers
According to the World Gold Council in London, Central Banks around the world were the biggest losers as they own nearly 19% of all gold mined.

Biggest Holders of Gold
Paulson & Co and BlackRock are the top holders of gold. BlackRock holds nearly 5.9% in the iShare Gold trust which makes them the biggest holder of gold in this trust, and fifth biggest holder in the SPDR Gold Trust. Paulson & Co is the biggest holder in the SPDR with nearly 5.7% holding.

DISCLOSURE & DISCLAIMER: The Above Is For Informational Purposes Only And Not To Be Construed As Specific Trading Advice. Responsibility For Trade Decisions Is Solely With The Reader.

by Naeem Aslam