Kunal Shah Head of Commodities Research Gold, where it is heading??????? Why Gold outperformed?? China and its long term plan on Gold Investment demand strong, jewellery demand weak

Everything has Changed after first hike of Interest rate by Federal Reserve!!!

Stronger Dollar and weaker emerging market currencies

Massive weakness in Brazilian and all Latin American currencies from

Unbelievable crash in Russian Rubble

China runs huge Trade surplus, Rebound in manufacturing PMI and strong services PMI

After deflationary scenario PPI has inched up and CPI too!

China aggressive stance indicates they are more confident about economy

Ambitious Projects lined up like Silk Road, AIIB

China debt is concern but recent liquidity infusion will avoid the problem in short term

Investment demand of Gold will remain robust Investment demand likely to shoot up from 920 to tonnes this year

China not slowing down, its deliberately slowing its economy, concern still remains Sharp drop in FX Reserves, stability in Yuan, Massive infusion of liquidity have stabilised Chinese economy, but concerns still remains from the long term point of view. For the time being, we believe the worst is over, China’s GDP growth rate may not go below 6.5% for the rest of 2016, so deceleration is moderating China’s commodity demand growth rate have moderated but not dropped sharply. China’s economy even if grows at 6% growth rate with $11.5 trillion dollar economy it still phenomenal.

Robust Chinese Gold demand. Estimates by groups such as the World Gold Council and Metals Focus put Chinese gold demand at 834 metric tons in 2015, based on imports from Hong Kong and local mining. The Shanghai Gold Exchange (SGE), the official exchange of Chinese gold, had over 2,500 tons of withdrawals in 2015.

Rapid expansion in Chinese monetary Policy strong case for Inflation.. The re-acceleration of the supply of money in China, using the M2 figure, could stoke longer-term inflation and aid gold prices. China M2 grew at a 14% rate in January, the highest since June vs. a 6.1% increase in the U.S. China has about $21.7 trillion in circulation, the U.S. $12.4 trillion and the euro zone $9.4 trillion. Rising M2 could be a leading indicator of Inflation going forward

M2 to GDP ratio has been expanding The ratio of M2 to GDP has been expanding at an ever- increasing rate, after hovering around 1.0 at the turn of the century. With growth of % in M2 and 6.5-7% in GDP, this ratio will rapidly increase. A high multiple may lead to inflation and higher gold demand in China.

China accumulating Gold While China has steadily increased its central bank gold holdings, they still are far behind those of other central banks. China's holdings relative to its reserves are just 2.2%, vs. the U.S. at 74.9%, the European Central Bank at 26.7% China holds 58.1 million ounces and the U.S million. China has been steadily adding to its reserves, as have other countries such as Russia.

Central Banks buying Gold….. Since bottoming out in 2009, central bank buying of gold has surged, especially by Russia and China, which have added almost 90 metric tons. China has a long-term goal of matching U.S. holdings of more than 8,000 metric tons.

Markets are ahead of the events and we wait for event and time the market Thanks A lot

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