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Daily Archives: May 7th, 2013

I have been asked to share my thoughts about gold.

I am in the midst of putting together my thoughts on this subject, however, my initial thought is that gold has carved itself out to be an asset class to be included in one’s investment portfolio, whether from a diversification point of view , reduce correlation risks, hedge against other asset classes and currency.  This trend has developed through time beginning from 2007.

You will recall that equity markets were booming into 2007 before blowing up in 2008.  In 2007, quite a number of fund managers were beginning to diversify into gold to hedge downside risks in the equity markets and also the bond markets.

When the 2008 financial crisis came, it was a real blow to the banking and financial markets………..DISTRUST stemmed from the aftermath.  Retail and corporate investors, family offices, trusts and institutional funds decided to reallocate their monies into gold while waiting for the financial markets and regulators to sort themselves out.

The financial crisis showed up the structural and policy weakness of the financial and banking sector.  It revealed the lack of governance and compliance.

Then the economic downturn took route from 2010 to 2012, and more monies went into gold as a safe haven.

Anyway, we will be putting up a more comprehensive post shortly.

Look out for it.

Rumours that George Soros short the AUD through the option market last Monday, meant that he could have short the AUD at about 1.04, which means he is looking at a huge trading profit.

We decided to make a small bet today as we were not comfortable given that the AUD has weaken substantially from last week.

We made a quick bet and short the AUD at 1.0240 and squared the position at 1.0188 for a trading profit of 52bps or 0.51%.