Stock Alert: Our Top 5 Stocks to Buy Now

Gold could Hit 40,000 Sooner Than Expected

Aug 16, 2019

Apurva Sheth, Editor,Profit Hunter Pro

Last week I wrote about gold and how it is firmly placed to follow Sensex to 40,000.

I explained how the domestic prices of gold are dependent on two factors.

  1. International Prices of Gold

    The international gold which is traded in dollars is far below its all-time high of US$ 1,920/ounce. It has broken out of a long-term consolidation and heading upwards.
  2. Exchange Rate

    We import most of our gold requirements and make payments in dollar. If dollar strengthens against the rupee then we pay a higher price for the imported gold. Rupee is in a long-term downtrend compared to dollar. This means importing gold will always be expensive for us.

--- Advertisement ---
Ex-Swiss Investment Banker Reveals His Biggest Investment Strategy in 4 Free Video Classes

Rahul Shah, ex-Swiss investment banker and Co-Head of Research at Equitymaster, is hosting a series of 4 free video classes for his readers, where he will reveal the details of something he's been working on for years…

The Double Income Project…

Rahul will show his readers, step-by-step, how to dramatically increase their income, potentially even double it…in what he believes is the earliest amount of time possible. a few short years.

For instance, if you make Rs 50,000 a month…Rahul's goal is to show you how to take it to Rs 100,000 in the long run.

Or if you make Rs 100,000…Rahul will show you how you could potentially increase it to Rs 200,000 in the long run.

This is different from anything Rahul Shah has ever done before – there's nothing to pay, no service to subscribe to and no forms to fill to attend these classes.

Just click here to sign up for the free video classes.

Now let's look at price chart of both these factors.


I showed the above chart of international gold to my Profit Hunter Pro readers when I recommended adding some glitter to their portfolio in October 2018. Gold had just managed to break out of an ascending triangle consolidation.

The Double Income Project: The Lazy Man's Guide to Doubling Your Income in The Long Term

Other factors like the US-China trade war, geo-political tensions between Iran and the US also supported the price rise.

Fortunately, we haven't seen a lower price in gold since then. It has been in a solid uptrend. It has even broke above the 5-year long resistance line which is at US$ 1,350. This level will now act as a major support.

Apart from this trade war between US and China is escalating. Central banks across the globe are anticipating a slowdown in global economy. The Middle-East remains a breeding ground for geo political tensions. US has a new tiff with Iran. China and Russia are increasing their gold reserves.

The international gold price is unlikely to fall sharply with all these factors at play.

Investors and traders in India have one more crucial factor to look out for now - USDINR.


I showed this chart of USDINR to my Profit Hunter Pro readers. The USDINR was trading around 73 back in October 2018. It fell substantially from the highs and found support around 68 which acted as a resistance earlier.

--- Advertisement ---
Watch this Video Now And You Will Stop Worrying About Money...

If you are concerned about money, then you MUST watch this exclusive video right now.

Because in this video, Richa Agarwal, Head of Small Cap Research, talks about stocks that have made a select group of people Crorepatis.

They invested in just one stock and ended up becoming Crorepatis in the long run.

In this video, Richa also reveals her unique formula to identify such potential RARE stocks.

Plus, she also discusses her special report, 'One Stock Crorepati: How to Get Rich With This Little-Known Indian Stock'.

This video is now available for your viewing...

This video could be taken down any time soon. So, hurry…

Click here to watch the video right away…

Domestic gold prices moved up even when rupee strengthened against the dollar. However, this has changed now.

Rupee nosedived more than 2% against the US dollar and breached the 70-mark on August 5. The fall in rupee's value marked the biggest single-day drop in the last six years.

The depreciation came on the back of escalation of trade wars and a sharp devaluation in yuan and uncertainty over the Kashmir issue. Rupee is trending lower since then and could weaken further against the dollar.

FIIs are on a selling spree in equities since May 2019. They are net sellers worth more than Rs 280 billion. This is likely to keep rupee under pressure for now.

Now think of domestic gold prices as a chartered plane flying on two engines. International gold price is one and exchange rate is another.

So far it was running only on one engine. But now the engine of exchange rates has also fired up. If both the engines are left on, then the flight of domestic gold prices will reach its destination of 40,000 much faster.

Hold on tight! This is the best time to be invested in gold.

Warm regards,

Apurva Sheth
Apurva Sheth
Editor and Research Analyst, Profit Hunter Pro

PS: Dear reader, identifying profitable trades in this market requires a proven trading strategy. This is exactly what our trading guru, Apurva Sheth, has developed for you. Get the details of this trading strategy here...

Recent Articles

Did the Tax Bonanza Really Deserve a 2,000-point Gain on the Sensex? September 20, 2019
Are investors overdoing their euphoria post the corporate tax cut bonanza?
The 5 Best Trading Opportunities in the Auto Sector September 20, 2019
It's not just the index. Many auto stocks are also going through a greed and fear cycle. Which one will you pick?
Auto Stocks: Wealth Destroyers or Once in a Decade Opportunity? September 19, 2019
Is the auto sector down with cancer or is it just a mild fever which will go away soon?
Fed Up of the Bad Real Estate Market? Here's a Stock You Can Buy Today September 18, 2019
This tough period for most companies in the realty sector has been a blessing in disguise for one branded real estate player.

Equitymaster requests your view! Post a comment on "Gold could Hit 40,000 Sooner Than Expected". Click here!