http://www.klsescreener.com/v2/news/view/97965

For now, the only sector that ap￾pears to be holding up well is ser￾vices. Once this turns down though,
a recession is likely to kick in. Pei
reckons it might be a good idea
for investors to start buying gold
to protect their portfolios. Gold is
currently trading at a two-year high
of US$1,334. Is there more upside
for the precious metal?
Pei thinks so. He notes that in￾stitutional investors are still buy￾ing gold as a hedge to their equity
portfolios. Central banks have also
been raising their gold purchas￾es, with the Monetary Authority
of Singapore now one of the top
30 largest holders of gold in its re￾serves in the world. “Gold tends to
move in eight-year cycles. In 2008,
gold hit its last trough. If this is true,
then gold should be very close to a
bottom now, after which we may
see the next eight-year bull run,”
he says.
The analyst points out that,
based on historical data, gold usu￾ally hits a bottom 13 months after
the DJIA touches a peak. With US
equities still on their way up, that
implies gold may be at the verge
of a new upcycle — one that could
see it hit highs of US$1,920, accord￾ing to Pei’s forecasts. — Th e Edge

good idea for investors
to start buying- fr the edge

DESPITE the US adding a much
larger number of people to its work￾force than expected last month, Pei
Sai Teng, investment analyst at Phil￾lip Securities, warns that the coun￾try is just months away from a full￾blown recession.
For one thing, unemployment
is still inching up, even though
some 287,000 workers found jobs
in June compared with just 38,000
in May. “Unemployment was at
its lowest level of 4.7% in May
before climbing 0.2% to 4.9% in
June, implying that there are fewer
people looking for work even as
unemployment rises,” says Pei. Th e
US labour force participation rate,
which measures the number of
people employed in the workforce,
recently touched a low of 62.7%.
Meanwhile, wage growth has
been largely stagnant since 2007
and infl ation appears to be trend￾ing down even after three rounds of
quantitative easing (QE) and eight
years of low interest rates. “As such,
GDP has been fl at and the economy
has been stuck in a low growth en￾vironment since the global fi nancial
crisis,” adds Pei. “We believe asset
pricing is a function of low growth
and infl ation, so we don’t see much
more upside for the equity market
from here. At its current valuations,
we believe we are at the peak of the
US equity cycle.”
Th e way he sees it, the US econo￾my is now dangerously close to tum￾bling into recession, making it a good
time for investors to pull out of eq￾uities and channel funds into gold
before it is too late. Even though the
safe haven commodity is up substan￾tially since Brexit, there is still room
for gold to rise further from its cur￾rent levels. “If we believe that equity
markets are going to go down, then
gold is a good way to diversify our
portfolios,” says Pei.
Market signals
So, what are the chances of a crisis oc￾curring and when will things start to
fall apart? Based on Phillip Securities’
research since the dotcom crisis in the
early 2000s, unemployment typically
hits a trough when subsequent data
shows a rise of at least 0.2%. “As the
unemployment rate has risen 0.2%
to 4.9% in June, this is a red fl ag. We
should see unemployment slowly
increasing in the months ahead, and
the Standard & Poor’s 500 and Dow
Jones Industrial Average (DJIA) will
start moving downwards soon after,”
says Pei.
Already, the number of paid US
workers is falling, with non-farm
payroll data showing a 26.5% drop
in the number of new jobs awarded
in 2Q2016 compared with 1Q2016.
“Even though non-farm payrolls were
up 287,000 in June, it is still trend￾ing down. Once companies begin
retrenching workers, a recession is
usually not far behind,” says Pei. Th e
US manufacturing sector is already
in a recession, with the Fed Dallas
manufacturing index, which meas￾ures manufacturing output in Texas,
negative for 17 consecutive months
compared with 29 months during
the global fi nancial crisis.
Th e other indicator signalling an
imminent stock market crash is the
amount of margin debt against GDP,
which appears to have reached a
peak in the wake of QE. Margin debt
is the value of securities purchased
on borrowed cash. As liquidity in
the market rose on the back of QE,
excess funds were channelled into
equities, driving stock markets up.
But since the US Federal Reserve
stopped QE in May 2015, the Wil￾shire 5000 Total Market Index has
plateaued, signalling that the market
may have peaked.

Gold could hit US$1,920 — Phillip Securities. From today the edge

http://www.focusmalaysia.my/Mainstream/Borneo%20Oil%20rides%20on%20gold%20rally

Why This Aussie Firm Says Gold to 'Certainly' Hit $1,500, Maybe Even $1,900

Friday July 08, 2016 10:04
(Kitco News) - Another bullish call on gold. Surprise, surprise. But, this Sydney-based firm sees the potential of a $200-500 rally in gold because of what’s happening in Asia.

“You have to look at the long term in gold…more people are coming into the market looking for gold and there’s not much there, so gold’s has got the potential to rally quite strongly,” Barry Dawes of Paradigm Securities told CNBC Friday.

“I think we’re certainly going to see $1,400 quite soon and I think we’ll certainly see $1,500 by year end and maybe even that $1,900.”

Positive sentiment towards the yellow metal has been prevalent with Bank of America Merrill Lynch being the latest among a slew of banks to up their gold price forecast for this year. Prices have managed to maintain strong gains with gold futures rallying some 27% since the start of the year. August Comex gold futures last traded down $6.40 at $1,355.70 an ounce.

Yes. Will go toward 0.20

KUALA LUMPUR: EG Industries
Bhd, which is in the midst of preparing the listing application for
its wholly-owned Th ai unit SMT
Industries Co Ltd (SMTI), sees opportunities in the Thai automotive
industry to further expand

EG Industries poised to tap
into Th ailand’s auto industry