As the Chinese let the yuan adrift, currencies fall in fear. In the flight to safety, gold appears to be rising. This may be a temporary safe haven avenue but is not logical to expect to be bullish on gold in the wake of a global slowdown triggered by China, among the world's biggest buyers of gold. Purchasing power of the wealthy, the Gulf upper income groups and use of industrial gold both stand curtailed and so one cannot bet on gold except as an immediate reaction. Chinese and Indian consumers are likely to continue to buy gold for social reasons, but sustaining gold prices seem difficult. If one buys gold in difficult days, one has to cut consumption elsewhere. So gold will be a temporary rise.
A better bet for eventual wealth accretion may be the Yen as the base of the Japanese economy seems sound technically. Similarly, the property market in Australia may be a good bet to park. The Chinese will eventually return to Australia. Australia is a resource based economy and a vast continent. Given the falling Aussie ( and with current account deficit threatening to widen, given the fall in commodity prices) it might be a good value for money proposition.
Hong Kong and Singapore look a difficult terrain as they are strongly dovetailed to China. Europe has to sort out its political and economic concerns. The Swiss policy do not welcome more.
US assets stay on top. Brace for one more currency run!
This blog recommends no investment. All views are expressed without any risk or responsibility.
A better bet for eventual wealth accretion may be the Yen as the base of the Japanese economy seems sound technically. Similarly, the property market in Australia may be a good bet to park. The Chinese will eventually return to Australia. Australia is a resource based economy and a vast continent. Given the falling Aussie ( and with current account deficit threatening to widen, given the fall in commodity prices) it might be a good value for money proposition.
Hong Kong and Singapore look a difficult terrain as they are strongly dovetailed to China. Europe has to sort out its political and economic concerns. The Swiss policy do not welcome more.
US assets stay on top. Brace for one more currency run!
This blog recommends no investment. All views are expressed without any risk or responsibility.
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