I have no views, and I have no position in gold. I do not understand bullion or most of the commodities. This is a caveat.

However, I know one thing – price is determined by demand and supply. This is universally true. And has always been true.

Now one story I keep hearing is that the goldsmiths of Kerala are not happy because people are not buying jewellery – obviously. Income levels have not gone up enough to justify spending on gold. So some of the old gold is recycled or worse it is even sold for buying some luxury product – like a trip to Singapore. This is not good news for the jeweller.

When the Rupee weakens against the dollar, gold prices look more expensive in India than abroad – again obviously.

Will the Indian gold buyer stay away from gold during Dussera and Diwali? doubtful. I also heard of some small investors who have sold gold / gold etf for paying for covering their share-market losses….

With all this happening, life looks difficult for a gold trader…..who has to take a daily call based on charts. He/she has no clue on global supply – demand relationship. Tough life.

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  1. the gold trader can still bet that dowries will continue to be given and festivals celebrated.both will involve gold.and with 2000 tons of gold coming on board every year and industrial and personal consumption remaining more or less same at 2200 tons,the supply demand as a commodity hasnt really changed much since many years.

    this is outside of the fact of central bank shenanigans which affect gold prices.this is driving the volatility

  2. Now everyone knows that it is easy to print the currency but can not produce Gold. Today any treasuries of the Government at least think that they should not have all their foreign reserves in Doller and Euros only. Even if the prices nose dive, it is a safe bet than all of the currencies.

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