Articles

Riches to Riches

 

UHNWIs: The Wealthiest People on the planet

Published March 2014 in the magazine: Macau Business

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 Wealth inequality is a potential cause of friction worldwide

 

Riches to Riches 

by André Ribeiro

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Wealth is a fascinating topic. The amount an individual owns impacts his or her everyday life in thousands of ways. It is a basic tool for survival in modern societies.

One of the most interesting things about wealth is how unequally distributed it is around the globe. A few people own a lot of it, while billions have barely enough to get by.

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The hard truth

Published January 2014 in the magazine: Macau Business

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It might be time to sell U.S. equities and get into heavy metal – try physical silver instead

 

The Hard Truth  

by André Ribeiro

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The United States stock market has risen considerably in recent months, while the prices of gold and silver have dropped. But some forecasts hint that these trends will reverse this year, perhaps meaning a multi-year rally in the prices of the precious metals, which could propel them to new record heights.
Last year’s stock market rally in the U.S. was strong, the Dow Jones Industrial Average passing the 16,000 mark and the S&P 500 index rising above 1,800 for the first time. The charts of the weekly performance of the S&P 500 index and the Dow Jones from 1990 until the beginning of this year show the formation of what is called in technical analysis a “broadening top” pattern – a phenomenon this column has touched on before.
A broadening top, also known as a megaphone pattern, frequently occurs towards the end of an over-extended bull market. It comprises three peaks, each higher than the one before, sandwiching two troughs, the second lower than the first. A broadening top ends with a long, steep drop after the third – final – peak.
The current broadening top trend seems to be close to the end of its final climb in the plots for both the Dow Jones and the S&P 500. It may reach its peak in the next couple of months. When it does, stock prices will plunge and stay low for some time.
Massive injections of liquidity by central banks and low interest rates have been an important cause of the increases in stock prices since 2009. But the effects of this sort of policy are fading. This means precious metals are now a great investment option, being likely to climb steeply in value in the years to come as investors seek out safe havens.
Official data shows that the mainland’s imports of gold from Hong Kong increased to 148 tonnes in October. Demand for gold in the mainland reached record heights last year as the price of the metal dropped.

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Trouble ahead for stocks

Published March 2013 in the magazine: Macau Business

 

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Stock markets may soon drop sharply, if trends uncovered by technical analysis hold true

 

Trouble ahead for Stocks

by André Ribeiro

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Bubble, toil and trouble

Published June 2013 in the magazine: Macau Business

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The stock market bubble has a gold-and-silver lining

 

Trouble ahead for Stocks

by André Ribeiro

 

The stock market rally since last November has been strong, the Dow Jones Industrial Average (DJIA) thrusting above 15,000 points, and the S&P 500 surpassing 1,600 points for the first time ever. One important cause of the rise in equity prices this year is the massive injections of liquidity by central banks.
 
There may be a correction of 5 percent to 10 percent in the middle of this year with the DJIA on its way to probably exceed 17,000 in the next few months, reaching the upper boundary of the megaphone pattern I wrote about in these pages in March. U.S. stock markets are probably in the final stage of forming a big multi-year top, which will be followed by the deepest stock market decline in years.
 
The present pattern of movement in the prices of precious metals and mining stocks is similar to the pattern in 2008, when the price of gold began rebounding from a drop of about 30 percent, on its way to climbing above its previous peak about a year later. The price of gold between April 1 and April 15 this year, fell by 18 percent or $220 per ounce, plunging by 9 percent in just one day. However, strong demand for physical gold cushioned the fall, and by the end of the month the price had recovered to about $150 above the floor of the latest trough. Many retail investors took the opportunity to buy, and queues formed in gold shops in Macau, Hong Kong and mainland China.
Investors often focus on financial markets and news, and fail to understand that gold and silver are commodities governed by the conventional law of supply and demand. If the price falls, demand increases.

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Pockets: Silver lined

Published February 2013 in the magazine: Macau Business

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High demand and limited supply of silver are making the metal an attractive alternative investment

Pockets: Silver lined

by André Ribeiro

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The statements, opinions and analysis presented in the texts and newsletters on this website are provided as a general information and education service only. Opinions, estimates and probabilities expressed herein constitute the judgment of the authors as of the date indicated and are subject to change without notice. Nothing contained in this website is intended to be, nor shall it be construed as, investment advice, nor is it to be relied upon in making any investment or other decision. KowloonGold or its authors shall not be responsible or have any liability for investment decisions based upon, or the results obtained from, the information provided.  

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