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Pratik Sharma From Komfie Manalo, Opalesque Asia:

Liquidity has pushed gold stocks to underperform gold during May and June as the markets have a preference for liquidity especially in times of credit distress, said Pratik Sharma, Managing Director at Atyant Capital, a specialty investment manager that focuses in the Indian equity markets and precious metals. Gold is a more liquid assets than gold stocks.

In his latest communication with investors, Sharma said that as liquidity is becoming an issue to their performance, Atyant has outlined a new strategy to navigate the volatile markets over the next four months.

He said: "In the immediate term, we see a decent summer rally in the precious metals complex and work to get back some of our losses. We also have a list of warning signs we expect to see prior to the next liquidity panic. One would be gold making new highs, but silver and gold stocks failing to do so. This would be a red flag and a sign of upcoming credit market distress."

The precious metals complex was amongst the hardest hit sectors during the last two months but it has fallen significantly to form a short-term bottom, Sharma argued. He reiterated the firms earlier forecast that the precious metals complex would stage a strong rally this summer adding to the fact that credit spre......................

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