Irrational fears stalk the world
market... investors then keep on knocking at gold's doors.
Gold is always a safe haven for
families, investors and central banks. So it continues to stay in the news
despite the low income streams. With the Fed minutes indicating slower action,
and with a lot of pessimism on growth, investors swarm into gold. Investors are
on a learning curve; it is the Japanese experience and now the European one
which is keeping them flocking to gold. People are wary of possible secular
stagnation. Chinese and Indian fascination for gold adds to the demand factor.
*
The Chinese economy is onto a
slower pitch. Housing and retail markets have been slow. Some 40 industries are
reportedly affected by the construction sector ; so the multiplier is weak. The
Chinese authorities seem to be loosening liquidity. the second largest economy
is however quite a safe bet with foreign exchange reserves at $ 4 trillion. So worries can only be in the immediate near
term.
*
India has been trying to gather
the growth pace. With nearly 300 projects waiting clearances, growth is a
natural priority for the government. So investment with all its multiplier
should work well for the 1 billion people economy. Falling oil prices should be
music to India's ears. As oil moves below $ 90, India growth story gets a push.
*
Petro-producers should start
worrying as extraction costs are high. The Middle East looks set for
deceleration unless its investment funds are loosened. Economies like Dubai, so
dependent on extraneous factors seem suddenly vulnerable. Oman appears to have difficulty in extracting its limited reserves.
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