Gold has a little more to go up supported by technicals.

As suggested here, gold has been climbing up. Unless there are coordinated policy decisions announced , gold seems inclined to climb higher as the technicals support the sentiments. Dollar, equities and oil have been into weaknesses; and adds to investor anxiety. In the shortest run, gold looks the best haven. 

Bullish on Gold for the coming week.

Gold is likely to gain in the coming week unless coordinated central bank action is forthcoming. Several strands on the international economic arena together are likely to have a benign impact on gold.

ü  The International Monetary Fund last week cut the 2014 global growth forecast to 3.3 percent from 3.4 percent. This will add to investor anxiety and seek a safe haven in the precious metal.

ü  The European Central Bank must hope to take the euro down so that European competitiveness is not so affected. With the impending deceleration of Germany, Europe's powerhouse, Europe looks wobblier.

ü  Historically, Germans have not been keen on government spending and hence attempts to stimulate Europe may meet German resistance.  Germans will delay or stall Draghi's desires to expand ECB's balance sheet.

ü  Given that the strengthening of dollar will impact adversely on American competitiveness,  and given that the Chinese are in no mood to listen to let the Chinese yuan  be decided by market forces (despite the Chinese proud claims that the yuan is being used as reserve  currency at least by some central banks) Americans may like a weaker dollar.

ü  On the pretext that a drop in US stimulus program me would slow down global growth, America will keep its expansion options open. (One of the commendable things is that the Fed is rather transparent with its policy implementation timetables.) 

ü  The German idea of  shift away from government spending to private and public investment is not a short run solution. Given its relative non acceptance of migrants Germany's costing is unlikely to attract private investment.

ü  Given that German exports are inversely related to euro, and given their historic intransigence ECB seems a powerless creature,  USA is a better destination for digital technology.

ü  With the Chinese economy still slow and with no great structural reforms on the anvil for India, investors may like to choose a safe heaven.

ü  The safe haven currency of Swiss Franc is affected by Switzerland's zero rate policy  and possible disinflation.

Irrational fears knock at gold's doors

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.

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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.

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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.

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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. 

Gold returns ...

Tuesday/ Wednesday are days the World came under a barrage of not so benign news... worried investors in a flight to quality seemed to get back to gold...Chinese came back again after a holiday to buy their precious metal...A parallel run by risk averse investors rushed once more into gold. So the old grandma's favorite  was lustrous again thanks to haunting fears of a slowdown. Will it hold? Unlikely-  as there is some correlation  between oil and gold... both move in tandem. So as oil looks dull, gold may have to gather some dust. But for today and until the fear wanes off, gold looks good.