Gold price driven to all time high as USD declines. (It has hit RM 3.017 intraday on the 11th April 2011 was RM 3.632 20th April 2010.) Investors were driven by the USD decline and precious metals will continue it's up trend as they transverse to gold, sliver or precious metal. Ong Yi Ling, investment analyst at Phillip Futures in Singapore, has this to say "I think there is a good chance that gold could hit USD 1,500 an ounce within this quarter"
Your guess is as right as mine, commodity prices will escalate and keep heading up wards. So any investments into companies that benefit from the rise in commodities prices is a choice. However, companies that are affected in terms of production and material cost when commodities price keeps an upward tend will have their earnings shave off thus is a poor choice. This is no rocket science, but merely rational thinking. On this note we sometimes still ignore it and get trapped.
Another aspect is the ever increasing inflationary threats. Even with Bank of China and the European Central Bank interest rates hikes, inflation is expected to continue it's raise. Thus any defensive mode of investment must yield an annual return above inflation. If we don't take into consideration this, our annual rate of return for each ringgit (dollar) we have will have a negative return. It is called Real Return after having minus off inflation. (Total Return - inflation = Real Return)
So people let's be wise and also watch crude oil price (last price on 11th April 2011 @ USD 125.60) and also Chinese Yuan - was 6.800 in 21st June 2010, it is 6.528 11th April 2011. It is a new world order as global adjustments is the key factor most major economies are faced with currently.
Till then!
TJ
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