Gold started to rally from the month of July 2011 and it appreciated most in the month of August by clocking at $1,923 an ounce in terms of international currency and it hit Rs 28,485 per 10 grams on domestic front.
One trigger and gold lost all its charm, a safe-haven appeal. Last Friday, September 23 was the worst day for the yellow metal; it nosedived as much as $111 in international trade. Same mirrored over the domestic front as well where it lost more than 10% on MCX.
Following the Friday fall, gold continued a falling streak on Monday with spot gold seen a biggest-three day loss in 28 years.
The biggest losers over the street were the speculators who were long for the commodity and especially Gold traders and manufacturers who hedged their positions over the upper side, but who knew it, the gold bubble will burst in such a way.
They suffered losses into hundreds of crores, which ranged between anywhere from Rs 10 crore to Rs 100 crore or more, depending on their hedge.
Experts say prices may see some more correction and they expect prices to fall more to Rs 23,800 by the end of this year.
October may see a rise in prices of gold due to its festive demand with the physical buying to stay intact. But after November, gold may fall again.
If gold is falling, how can silver stay behind, it also lost 22% after hitting an all time high a month back.
Reasons are many, CME raised margins, dollar registered a peak against major currencies, panic-selling etc. But, these reasons were enough to burst a ‘golden balloon’.
The only people smiled on this fall were the ultimate consumers, who reaped the benefit of falling prices and again started physical buying with some still waiting for another correction.
At present, gold is trading in the range of Rs 25,800 – Rs 26,200 per 10 grams and silver is trading in the range of Rs 51,000 – Rs 53,000 per kg.