While 22 karats gold for 10 grammes was traded on Oct 9, 2013 at Rs 27,870, exactly the same time last year, 10 grammes gold was trading at Rs 30,300. That's a good 10 per cent below last year. Check gold rates here

Had it not been for the Indian rupee falling to the 62 levels against the dollar, we would have got gold at Rs 25,000 per 10 grammes.

Despite the fall in the prices this year, it's unlikely that this festive season there would be a surge in demand.

In fact, trade numbers released on Wednesday reveal that import of gold dropped 82 per cent in September to just $800 million.

Also, if one is looking to buy gold as an investor this season, getting superlative returns from the metal is ruled out. Firstly, the rupee is likely to get stronger against the dollar going forward, making gold prices even cheaper.

On the other hand Indian gold tracks international prices and gold is clearly headed lower in the international markets.

Also, it's possible that the Federal Reserve would taper off its quantitative easing programme in the US, possibly by the end of the year, or early next year, which should see gold prices drop.

The quantitative easing programme in the US is a process, whereby the US Central Bank (Federal Reserve), buys bonds to infuse fresh money into the system. A lot of this money has found its way into gold.

With the liquidity tap being partially shut, do not expect gold to rally substantially. In fact, gold is set to end the year with losses for the first time in 12 years.

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