Looking at the gold charts in perspective of 5 yrs ---- Gold went almost parabolic and tocuhed a little higher than 2770 in INR/ gram. It has now corrected down to roughly a level of 2529 INR/gram. This is a correction of appox 10%. Its approaching the channel now and what needs to be seen is if it bounces off the upper end of the channel or it enters the channel and comes down to either the lower end of channel or significant horizontal support zones of 2250 appox levels.
But given the
- Deficit India is running - ensuring that borrowing needs of the government wont come down given the fact the transfer payments to rural areas would continue
- Imported commodity inflation purely due to supply/ demand fundamentals
- Debasing of USD and ineffect INR
- Growing middle class who have faith in gold more than anything
Will ensure that the Bull in India will continue for some time.
Similar thoughts for Silver.
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