Do you have golden memories? You may or may not have. But gold has golden memories. Not one or two, it has golden memories almost all the times. It has got some historic brushing also. The golden period of gold had started when mankind recognized the yellow metal as worthy (worth as life). Men and women gave due attention at early days. But when women had started romancing it the story became more serious and more contemporary. When mankind discovered the investment value in gold the story had become more realistic. Actually after that the golden period of gold had started.
When business minds started working ornaments of various varieties came to the scene. Women started discovering more and more parts of their body to cover it with gold ornaments. As a result gold had become a master metal. The social scenario played a vital role in writing the golden history of gold. In Indian scenario the dowry system acted as a catalyst for gold. When it became a status symbol gold found it’s key role in weddings. So many lives are spoiled because of this metal. Many poor women committed suicide only because of this metal. The main cause of dowry related deaths are gold now days in India. But the sad thing is that it added glory to the famous and adventurous story of gold.
Golden story -recent times
When the New Year (2009) began the price of gold was 13610 for 10gms. After one and a half month the price shot up and on Feb 17, 10gms of gold will cost Rs15230. This is only a recent record. If the trend continues gold may touch even 20,000 for 10gms. Jewellery shop owners swear that their business is dull. Not many retail buyers are there in the market but surprisingly the prices are scaling new heights. The main reasons for the particular trend are the fall in equity markets world over. Investors who are fed up with the degradation of their value in equities switch it over to gold. As a result demand increases and naturally price goes up. This has been happening from the second half of last year. (Specifically says after the collapse of Lehman brothers).
In Indian scenario there is one more problem. That is the depreciating rupee. Recently Indian rupee touched 50 mark against US dollar. Depreciating rupee also plays a key role in the increase of gold prices. The third reason is increased buying interest in gold funds. Now a days the demand for gold funds increased like nothing. The sad thing is that in this type of investment the lion’s portion will be traders. They will never take delivery of the metal instead they will cash on daily up and downs.
In recent times large numbers of speculators are involved in the gold market. They are the villains unnoticed behind the sharp increase in the price hike of gold. Actually the time is favorable for gold as well as speculators who trade on gold.
Gold and equity market
The sub prime devil released by US is wandering all over the world. Be it east, west, north and south the situation remains the same. The devil is gulping the points in equities market. Banks had been vanished. Investors had lost crores of rupees as a result of this meltdown in the stock market. Take the case of India in particular, the picture remains the same. In January 2008 Bombay sensitive index or sensex scaled an height of 21,000. This was a classical mark set by the united efforts of FIIs and domestic players. But the glory didn’t last long. The rest of the year was gloomy days for the Indian equity market. It came down and down after days and breached all the confidence levels set by the analysts. Now it is hovering around 8000 mark (as on 20-Feb-09). As a result of this panic investors started looking for alternate investment avenues. They found Commodities market is the right place to depend upon. Then gold started smiling at the investors. Like ladies investors also started romancing gold. They started nurturing their dreams upon it. In India gold is sold in terms of eight grams. 10,000 was the historic mark set by gold (for 8gms) in recent past. But in the third week of February it crossed the 11,000 mark for 8gmn. In the investment horizon only thing which glitters is gold.
A burden for common man
Indian equities market had witnessed a short term buying trend during the second week of February this year. This was due to the huge expectation of interim budget. But when Pranob Mukherjee started his interim budget things had been changed. Snesex tanked a 300+ point downward trend. For three consecutive days the downward trend prevailed in the market at the same time gold price started increasing. There are some foreign reasons also. Russia had announced that it would buy gold. This news acted in favor of gold and gold still continues the upward trend.
Gold price hike is a big concern for the common man in this country. Particularly in a society which evaluates the standard of a marriage in terms of gold given as dowry. When gold price increases definitely the minds of fathers with daughters would beat faster. Due to the price hike in the country arised due to global conditions(!) marriages had became more and more costly. The burden of which ultimately falls on the shoulders of the bride’s father. If the price of gold increases further the number of unmarried women in this country will increase, that is the power of this yellow metal.
Hope of any escape
In the recent present it is not possible. Since the equities market is down the situation will continue. Analysts are of the view that the downward trend in the equities market would continue for some months. When the new government takes charge there is a possibility for the equities market to bounce back. There is a grand finale called the annual results announcement. This would give actual picture about what is happening in the corporate sector. After these events market would decide whether to go up or go down. If the equities market regain it’s strength then the attraction would shift towards it and the price of gold may come down.
Aggressive speculation is happening in gold funds. Now all the traders are taking positions. When the prices will reach the peak they will switch off their position and return home with the profit. When that happens there is a possibility of price decrease. In 98-99 same situation was there in the gold market. Then the European banks started selling gold in an aggressive manner which reduced the price of gold. If same thing happens there is a possibility of price cut.
The other relief can be happened is that the emerging of Indian rupee as a strong currency against dollar. India’s inflation rate came last was 3.92 percent. Inflation in the downward trend means currency strengthens. RBI will also take steps to make rupee strong. This move will ease gold price.
But the main thing should curb carefully is the speculation. Speculation should be controlled by the authorities for at least short term in order to avoid the price hike (but this would never happen!). There should be some limit in taking positions or should make some restriction in terms of delivery taking. But this is not possible in the recent future. Which means gold will continue to be common man’s hurdle. And this will continue so.
When business minds started working ornaments of various varieties came to the scene. Women started discovering more and more parts of their body to cover it with gold ornaments. As a result gold had become a master metal. The social scenario played a vital role in writing the golden history of gold. In Indian scenario the dowry system acted as a catalyst for gold. When it became a status symbol gold found it’s key role in weddings. So many lives are spoiled because of this metal. Many poor women committed suicide only because of this metal. The main cause of dowry related deaths are gold now days in India. But the sad thing is that it added glory to the famous and adventurous story of gold.
Golden story -recent times
When the New Year (2009) began the price of gold was 13610 for 10gms. After one and a half month the price shot up and on Feb 17, 10gms of gold will cost Rs15230. This is only a recent record. If the trend continues gold may touch even 20,000 for 10gms. Jewellery shop owners swear that their business is dull. Not many retail buyers are there in the market but surprisingly the prices are scaling new heights. The main reasons for the particular trend are the fall in equity markets world over. Investors who are fed up with the degradation of their value in equities switch it over to gold. As a result demand increases and naturally price goes up. This has been happening from the second half of last year. (Specifically says after the collapse of Lehman brothers).
In Indian scenario there is one more problem. That is the depreciating rupee. Recently Indian rupee touched 50 mark against US dollar. Depreciating rupee also plays a key role in the increase of gold prices. The third reason is increased buying interest in gold funds. Now a days the demand for gold funds increased like nothing. The sad thing is that in this type of investment the lion’s portion will be traders. They will never take delivery of the metal instead they will cash on daily up and downs.
In recent times large numbers of speculators are involved in the gold market. They are the villains unnoticed behind the sharp increase in the price hike of gold. Actually the time is favorable for gold as well as speculators who trade on gold.
Gold and equity market
The sub prime devil released by US is wandering all over the world. Be it east, west, north and south the situation remains the same. The devil is gulping the points in equities market. Banks had been vanished. Investors had lost crores of rupees as a result of this meltdown in the stock market. Take the case of India in particular, the picture remains the same. In January 2008 Bombay sensitive index or sensex scaled an height of 21,000. This was a classical mark set by the united efforts of FIIs and domestic players. But the glory didn’t last long. The rest of the year was gloomy days for the Indian equity market. It came down and down after days and breached all the confidence levels set by the analysts. Now it is hovering around 8000 mark (as on 20-Feb-09). As a result of this panic investors started looking for alternate investment avenues. They found Commodities market is the right place to depend upon. Then gold started smiling at the investors. Like ladies investors also started romancing gold. They started nurturing their dreams upon it. In India gold is sold in terms of eight grams. 10,000 was the historic mark set by gold (for 8gms) in recent past. But in the third week of February it crossed the 11,000 mark for 8gmn. In the investment horizon only thing which glitters is gold.
A burden for common man
Indian equities market had witnessed a short term buying trend during the second week of February this year. This was due to the huge expectation of interim budget. But when Pranob Mukherjee started his interim budget things had been changed. Snesex tanked a 300+ point downward trend. For three consecutive days the downward trend prevailed in the market at the same time gold price started increasing. There are some foreign reasons also. Russia had announced that it would buy gold. This news acted in favor of gold and gold still continues the upward trend.
Gold price hike is a big concern for the common man in this country. Particularly in a society which evaluates the standard of a marriage in terms of gold given as dowry. When gold price increases definitely the minds of fathers with daughters would beat faster. Due to the price hike in the country arised due to global conditions(!) marriages had became more and more costly. The burden of which ultimately falls on the shoulders of the bride’s father. If the price of gold increases further the number of unmarried women in this country will increase, that is the power of this yellow metal.
Hope of any escape
In the recent present it is not possible. Since the equities market is down the situation will continue. Analysts are of the view that the downward trend in the equities market would continue for some months. When the new government takes charge there is a possibility for the equities market to bounce back. There is a grand finale called the annual results announcement. This would give actual picture about what is happening in the corporate sector. After these events market would decide whether to go up or go down. If the equities market regain it’s strength then the attraction would shift towards it and the price of gold may come down.
Aggressive speculation is happening in gold funds. Now all the traders are taking positions. When the prices will reach the peak they will switch off their position and return home with the profit. When that happens there is a possibility of price decrease. In 98-99 same situation was there in the gold market. Then the European banks started selling gold in an aggressive manner which reduced the price of gold. If same thing happens there is a possibility of price cut.
The other relief can be happened is that the emerging of Indian rupee as a strong currency against dollar. India’s inflation rate came last was 3.92 percent. Inflation in the downward trend means currency strengthens. RBI will also take steps to make rupee strong. This move will ease gold price.
But the main thing should curb carefully is the speculation. Speculation should be controlled by the authorities for at least short term in order to avoid the price hike (but this would never happen!). There should be some limit in taking positions or should make some restriction in terms of delivery taking. But this is not possible in the recent future. Which means gold will continue to be common man’s hurdle. And this will continue so.
Posts
0 comments:
Post a Comment