Gold has made a stunning comeback in 2016
What's the reason?
Weakness in Dollar
Negative Interest rates Policy pursued by Central Banks
Let's focus on something else and here's the context:
There is high profile discussion happening on Withdrawal of high currency note across the world to fight corruption, and crime. I did mention about it in my tweet in Feb 2016
Baba Ramdev idea under serious consideration in America https://t.co/0YN4slzlEs
— Deepak Singh (@smarket) February 20, 2016
I came across a very interesting argument on why Gold is rallying and might rally even more.
Argument is very simple:
If Govt around the world come together and put an end to issuing notes worth more than say $50 or $100 in an effort to stop tax evaders, criminals and terrorists, then the currency of choice for criminals would become Gold.
Think about it—in a world without cash, gold (and silver) becomes the currency of anonymity. You can see how this will play out: they ban cash, people start using gold… well, now we have to make it illegal to hold gold, because gold is the money of the underworld
If the discussion gains momentum, then it's possible that we might see incredible demand for physical gold. I am not making any judgment call on Gold but this is a space worth watching.
3. Subscribe: - How to access Protected Posts?
Do you like reading Market Observations and don't want to miss it - then Like our Facebook Page. Market Observations will show up on your facebook timeline.
Please share your comments on what you think of market observations, market and trading in general
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers