MEMORANDUM ON GOLD

MEMORANDUM ON GOLD

• 1.
  MEMORANDUM 1 Date: February7, 2015 To: Professor Lawrence A. Souza From: Amrutha Rajendra Re: Gold to rise by 15% over the next three months We are tracking GOLD prices. Based on our research, we forecast the price of gold to rise by 15% over the next three months based on following three factors: Rise in demand and consumption of gold by increased production, frequent transactions by central banks and mining companies and strengthening the US DOLLAR. We recommend the following 36 trades. Indexes (3) ETFs (3) Stocks (5)  Buy Forwards  Buy on margin  Buy on margin  Buy Futures  Buy call options  Buy call options  Buy call options on futures  Write put options  Write put options  Write put option on futures Trades (12) (9) (15) Tickers: XAU, HUI & KGX Tickers: GLD, IAU & UGL Tickers: XAU, HUI,KGX,JSE & GOX Total: 36 trades We are tracking Gold prices. Based on our research shown above, we forecast the price of gold to rise by 15% over the next three months based on following three factors: Rise in demand and consumption of gold by increased production, frequent transactions by central banks and mining companies and strengthening US dollar. Therefore we recommend the previously listed 36 trades.  EURO has been falling sharply vs dollar since beginning of 2015. The euro’s decline has caused European investors to seek out gold to shore up their portfolios.  Expect central banks in China, India and Russia to fuel demand for gold. Beijing is not only stocking up on gold but also encouraging its citizens to buy GOLD.  Fallout from the Swiss National Bank’s move to unpeg its currency to the euro has added to trading fears.  Quantitative Easing plan revealed by the European Central Bank is likely to reduce euro further to near dollar parity. 