394% increase in the price of gold from Dec 2000 to October times gold has reached new highs in 2010.

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1 Gold

2 Contents General Facts Why invest in Gold? Price Determining factors for gold Central Banks Hedge against Financial stress Jewelry and Industrial demand Gold Mining Production and Supply Gold demand and supply War, Invasion and Economic Uncertainty Economic Indicators Impacting Gold Prices Gold Demand in India

3 General Facts 60% of gold mined becomes jewelry. 394% increase in the price of gold from Dec 2000 to October times gold has reached new highs in million people depend on gold mining for their livelihood. 2 nd quarter gold demand was tonnes worth USD$44.5bn.

4 WHY INVEST IN GOLD? Gold is a foundation asset within any long term savings or investment portfolio. One of the few financial assets that do not rely on an issuer's promise to pay. It offers investors insurance against extreme movements in the value of other asset classes.

5 Central Banks purchases/sales. Hedge against financial stress. Jewelery and Industrial demand. Gold mining Production and Supply. War, invasion and economic uncertainty.

6 CENTRAL BANKS Central banks and IMF play an important role in the gold price. Interest rates are closely related to the price of gold. Gold price can be closely correlated to central banks via the monetary policy decisions made by them related to interest rates. India stands 11 th in Gold Holdings with tonnes. Central bank activity among the VIST (Vietnam, Indonesia, South Korea and Thailand) nations in terms of gold holdings increased by 28% in 2011.

7 Central Banks purchases/sales. Hedge against financial stress. Jewelry and Industrial demand. Gold mining Production and Supply. War, invasion and economic uncertainty.

8 HEDGE AGAINST FINANCIAL STRESS Gold can be used as a hedge against inflation, deflation or currency devaluation. Within the current economic scenario, countries are faced with huge deficits and more money that is pumped into these economies the printing of money basically then less valuable the currencies become. If the return on bonds, equities and real estate is not adequately compensating for risk and inflation then the demand for gold and other alternative & safe investments increases.

9 Central Banks purchases/sales. Hedge against financial stress. Jewelry and Industrial demand. Gold mining Production and Supply. War, invasion and economic uncertainty.

10 JEWELRY AND INDUSTRIAL DEMAND Jewelry accounts for over two-third of annual global demand. India is the largest consumer of gold Jewelry followed by China and the U.S. Industrial, dentistry and medical uses account for around 12% of gold demand.

11 Central Banks purchases/sales. Hedge against financial stress. Jewelry and Industrial demand. Gold mining Production and Supply. War, invasion and economic uncertainty.

12 GOLD MINING PRODUCTION AND SUPPLY The mining production rose by 7 percent to tonnes in 2 nd quarter Producer de-hedging exerted a modest negative influence on supply in second quarter. Recycling activity was 3% down year-on-year, as consumers in many markets held off on selling their existing 'loose' holdings of gold in anticipation of higher prices. The completion of de-hedging by world s two miners Barrick Gold mine and Anglo Ashanti Gold mine reduces the possibility of a price rise as seen in 2009 and 2010.

13 Central Banks purchases/sales. Hedge against financial stress. Jewelry and Industrial demand. Gold mining Production and Supply. War, Invasion and Economic uncertainty.

14 WAR, INVASION AND ECONOMIC UNCERTAINTY In times of war or in terms of economic uncertainty, people fear that their assets may reduce in value, that the currency may become worthless. Governments/people believe that Gold is a solid asset which will buy food/ transportation etc. or that it can be used as an alternate currency during such periods of uncertainty.

15 Standard and Poor (S&P) downgrades U.S credit rating in August 2011 Greece on verge of 98 percent default in September 2011 Standard and Poor (S&P) downgrades Italy s credit rating in September 2011

16 Gold Demand and Supply

17 Gold Demand and Supply Year

18 ECONOMIC INDICATORS IMPACTING GOLD PRICES GDP Non Farm Payrolls Industrial Manufacturing Data Business Inventories Value of U.S dollar Economic Stimulus package if announced Trade deficit

19 SPOT GOLD V MCX GOLD (3 YEAR TREND) Spot Gold MCX Gold Going hand in hand

20 SPOT GOLD V SENSEX (3 YEAR TREND) Sensex Index Spot Gold

21 SPOT GOLD V DOLLAR (3 YEAR TREND) Spot Gold Negative Correlation Dollar

22 GOLD DEMAND IN INDIA Gold demand in India will continue to be robust in the next decade. The cumulative annual demand will be in excess of 1,200 tonnes by 2020, valued at about Rs 2,50,000 crores. According to the World Gold Council (WGC) report for 2 nd quarter 2011, the demand for gold in India would be driven by rapid GDP growth, urbanization and rise in income and savings levels of the consumer.

23 Gold jewelry represented around 75 per cent of the total Indian gold demand in The southern states like Kerala, Andhra Pradesh, Tamil Nadu and Karnataka account for over 40 per cent of the country's gold demand. The research highlights that with 50 per cent of the Indian population under 25 and approximately 150 million weddings anticipated over the next decade, which will drive gold consumption.

24 TYPES OF INVESTMENTS Physical Metal Gold ETFs

25 GOLD IS ALSO VOLATILE

26 Common Man : Wedding Assume that on September 30 th, John Thomas fixed his daughter Christina Johan s wedding to be on 2012 May 6th, and that he plans to buy 25 pavan (200 g) gold as jewelry. Mr. John s choices Hope Prices falls before Marriage Buy 200g Gold now Buy 2 mini Gold MCX 2750/g Block over 5.5 lacs (at present level). Risk the possibility of a price fall later. Block only less than 50,000 as margin amt (at present prices) Invest the rest of 5 lacs in bank or other safe assets for 1 month. Hold the gold in demat form, maintain MTM.

27 P/L End of April 2012 for MCX Gold Time April 2012 Price@ 2900/g April 2012 Price@ 2650/g Profit Rs.20,000 profit from futures + Rs interest gain (8%) Rs. 20,000 loss from futures + Rs interest gain (8%) Conclusion Buy jewelry at high Oct prices, (and more with the extra gain) John avoids the high priced buy in Dec. Would be able to buy Jewelry at lower April prices. Note: This notional loss from futures can be reduced or nullified. Standing instruction can be given to exit futures if price fall below 2700 (or suitable prices), so that the loss is limited to Rs or even much lower. The flexibility of easy entry and exit available through online futures trading platform, enables even better strategies than that mentioned above.

28 Jeweler Scenario: Risks on both directions due to high volatility. Advance booking by customers Commitment to suppliers Jeweler choices Hope Prices do not fall sharply after stocking or Hope that prices do not rise sharply before stocking Hedge with gold futures; Sell and buy against each stock moves Avoid distress sales or purchases Reduce losses Make modest gains

29 Advantages of Gold Futures (MCX) platform Online Terminal (View/Trade at the comfort of your home/office) High depth/liquidity (MCX is no: 1 in India and no: 2 in world as per its website.) Different denominations available (1kg, 100g, 8g, 1g). Trading hours (10am to 11 30pm) covers all major mkts. Take/Delivery if you want. Store/Sell from demat. Margins as low as 4 to 7%

30 Research Support USE our research to know about major trends, entry/exit points etc. Daily Gold report Strategies (Short term as well as long term) for both International as well as MCX Gold News Alert : Both Indian as well as International Technical Analysis and Charts Customer support through phone, sms, , website

31 Geofin Comtrade Ltd. Geojit BNP Paribas Building 10th Floor, 34/659-P, Civil Line Road, Padivattom Kochi Kerala Phone: MCX Member code: FMC No.: MCX/TCM/CORP/1710 NCDEX Member code : FMC No.:NCDEX/TCM/CORP/0895 NMCE Member code: CL0324 FMC No.: NMCE/TCM/CORP/0245 ACE Member code: 6192 FMC No: ACEL/TCM/CORP/0429 Disclaimer Trading/investing in Commodity Derivatives involves considerable risk you may lose part or all of the initial investment. It is not ideal for all types of investors, and you are advised to seek professional assistance before the same. Past performance may not necessarily be repeated in the future. The news and views posted on this report is based on information which is believed to be accurate. This report is provided to enable you to make your own investment decisions and should not be construed as investment advice. The anticipatory moves mentioned in the report is purely subject to technical studies and does not take into consideration sudden currency volatility and data events. The author, directors and/or employees of Geofin Comtrade cannot be held responsible for the accuracy of the content posted on this report or for decisions taken by the readers based on such information.