The Indians Are Back!

Hello, friends. This is Vijay Bhambwani. I'm back with you again, this time to address your concerns and bring you good news on gold and silver.

You say I have been giving you fairly aggressive, ambitious, and forward looking targets for December 2021 and targets for December 2022, which might seem a little unrealistic to a lot of people.

But if you check my hour and 20 minute long Q&A session live on YouTube, which we've recorded on third of April 2021, it's still there in this playlist, followed up with a regular 10-12 minute video on eighth of April 2021 which is titled The Indians Are Coming, I've given you ample justification and in my own 360 degree worldview method of covering all variables and discussing in great length, sharing my thoughts as to why I think gold and silver are excellent long term investments.

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Now, the sum and substance was that over 400% jump in import demand by Indian households was the data that we received from the government of India, and I told you that this is extremely bullish. India being the second largest household consumer of a bullion, both gold and silver, will impact international prices and there you are. The international prices of gold and silver have started jumping again.

Silver has actually surpassed a round number of 70,000 as I see it on my screen on Thursday morning when I am recording this video. It will of course, be released on Friday on Equitymaster after due editing and post production.

My overseas friends who watch my videos on bullion please note, before you post any funny comments, that we in India trade our bullion in the commodity exchanges in Indian rupees. Where silver is concerned in multiples of 1,000 grammes, which is one kilogramme and where gold is concerned in Indian rupees in multiples of 10 grammes, not a troy ounce.

So what might seem bizarre to you because you're fixated on the US method of trading in troy ounces, we basically trade in metrics that are a little different. So when I say silver has gone up above 70,000, it is in rupees per kilogramme and gold has now finally surpassed Rs 48,000 for 10 grammes.

Now this is excellent news for traders or investors rather sorry, who were holding bullion.

 

Now what you see on your chart on your screen is how a silver hit a high of Rs 77,949 per kilogramme on seventh of August 2020 when Fast Profits Reports subscribers as well as Weekly Cash Alert subscribers received a very surprising email to book 20% profits on gold and silver and hold the remaining 80%.

Now I believe in sharing with my viewers who are not paid subscribers, but definitely subscribers of my YouTube channel also, the reason why I do something. Now the reason is that when I called up Zaveri Bazaar, I found that the physical or the deliverable price of silver and gold was trading and approximately 8 to 10% discount over the MCX.

Now that is not only shocking, but it's bizarre to the extent that the MCX price does not include delivery and 3% GST. In spite of the fact that price in physical should have been delivery plus 3% GST higher, the price and physical was actually 8% lower.

That rang an alarm bell in my head and I requested my subscribers to offload up to 20% of their holding and mind you if you have checked your Weekly Cash Alert morning mailers, we repurchased all that gold which we sold that 55,000 odd levels at 49,000, 47,250, and recently at 45,000.

So we are sitting in plum profits and we want back the gold, which we sold. So our quantity of holding remains the same and at the same time, we made a tiny profit. Now that was a reason for booking out.

What you're seeing on your screen now again is the price of silver. After hitting 77,049, it tested a low of 56,000 on 24 of September and is now starting to zoom up again.

Look at how the price is trading within a narrowing triangle formation. Any break out as and when it occurs above the 72,500 levels will see the all-time high of silver, which is 77,049 levels either being tested or even being overcome.

So now you see friends. What appeared as a very bizarre target of Rs 84,000 a kilogramme for silver in end of December 2022 seems very, very achievable now that around number of 70,000 has been overcome.

 

Right on your screen now is a daily chart of MCX Gold. Here again, it is in rupees for 10 grammes. You will see that the fall in relative terms was a lot steeper, a lot more precipitous in gold as compared to silver.

It hit a high of Rs 56,091 on seventh of August and that is where I told you to book 20% profits. Of course, we purchase everything back at significantly lower levels, but the price it a low of Rs 43,320. Now that's almost Rs 13,000 or 25%.

I don't blame a lot of people for the comments that they posted on my videos or commented, communicated or direct messaged me on my social media accounts as to why they thought this investment was wrong.

I don't blame you at all. I don't hold anything against you because when a price falls 25% from its peak, what the experts tell you, is that it's a bear market because the price fell 20%.

Well, I don't claim to be an expert. I am just a doer of deeds, a trader who has been trading the markets for 35 years. I've noticed price action. I've seen gold and silver cycles up and down and I think what the experts forgot was that the rupee can depreciate fairly rapidly against the dollar and now you are attempting to scale mount 76 to the dollar.

We already halfway between 75 and 76. So everything that is important and landed cost in India is getting expensive, including gold and silver and don't forget gas and a crude oil. The more gas and crude oil rise in Indian rupees, the more inflation there will be, and the bigger will be the rally in gold and silver.

So who should you believe? An investor called Vijay Bhambwani or the experts who are telling you to offload the gold and silver? I leave it to you out. Alpha to Omega or Omega to Alpha? It's a call you have to take. Now I bring up the chart of gold again On your screen.

A break out above the 49,000 mark can, I'm using the word can, see the price hitting 51,000 or higher in a very short period of time. Now I urge you, my friends, don't turn traders on gold and silver.

The cost of carry futures is high, the volatility is very high. The margin component and margin calls are fairly bone crunching. I would request you instead to think slightly longer term, which is end of 2022.

That is when you will realise the best of profits if it happens prior to that, if my targets of 65,000 on gold and 84,000 or 85,000 on silver are reached earlier, of course, I will record a video in the interim and tell you what to do.

But think long term. Instead of trying to make a quick buck and miss out the bigger picture by trading futures, I think you should take delivery either whatever you're comfortable with, I of course, favour physical delivery as number one, but if you were comfortable trading ETFs which are available only in gold and not in silver, trade ETFs, if you're comfy there.

Some people swear by gold bonds. All right, it's your call, right, but think long term. Don't try to make a few pennies here and there and miss out all the mega bucks that are likely to come in gold and silver.

So, my friends, the Indians have come. We Indians, by virtue of our demand of gold and silver, have triggered a rise. Of course, due to other global factors also, inflation lockdown Corona fears etcetera, etcetera, have only helped to boost prices. This is something that short term people over overlooking and giving cell calls on gold and silver. I would advise you to think long term and stay invested.

Like one gentleman added in the comments and I really loved it. I keep saying that gold is the currency of the gods and he said, Vijay, you forgot that silver is the currency of gentlemen. So if you're buying gold and silver, remember you're buying the currency of the gods and the gentlemen. Stick to it. Fiat currencies are losing their buying power, which is bullish for bullion.

On this happy note, I will bid goodbye to you, not before reminding you to click like on my video. Subscribe to my YouTube channel if you haven't already done so. Click on the bell icon to receive an instant alert about fresh videos being put up out here.

In the comments section, do let me know what you think about this video and what you would want me to record next. Also, help me reach out like minded individuals by referring my video to your family and friends.

Stay indoors. Stay safe. Thank you for watching. Thank you for your patience. Have a very profitable day. Vijay Bhambwani signing off.