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Thursday, May 30, 2013

The slowdown in China and weak global economic prospects may have hurt the prices of every other metal. But the correction in price of gold finds its roots in speculative trends rather than fundamentals! As per an article in Global Economic Trend Analysis, Hedge funds are least bullish on gold in more than five years. The 30% correction in the price of the precious metal has led to money managers cut their long positions on gold. But that is far from having an impact on the fundamental demand supply dynamics of gold. With neither the US nor Japan giving a clear signal of ending the monetary easing, liquidity is here to stay. Needless to say, jobless economic recovery and steep inflati on will only make the currency r isks seem more real. Hence if not as a hedge against inflation, do make sure that you own some gold if you already don't. Having to brace your portfolio against currency risk is no longer a risk for fund managers but retail investors as well. And gold can very well help you with that!

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