Which way? A Gold Timing exercise
- Thread starter themickey
- Start date
Nice strong move on gold with a close above resistance of 1950. Silver likewise.
There's much nonsense talk about gold correlations, so Thursday it broke all those rules bar one (which was silver correlation.)
Market generally (S&P500 etc) was up strong and gold was up.
USD Index was up, gold was up.
Gold price was up but all the major gold stocks fell (however ETF's up).
Indian rupee trend down while gold trending up.
Crypto was up and gold up.
The one correlation which I agree with and which held, gold bullish, silver moved up 100% of gold move.
The next level we look forward to is 2080, then 3000.
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Chanced upon this thread. Interesting discussion going on here. The reason why gold prices possibly go up from November ( at least from Indian context, India being a large market for retail gold) is that much of Indian crop produce is harvested from November. This is when farmers make money and most rural families invest in gold. Poor crop season may result in poor gold off-take as well. There has been argument in India's economic circles that gold is a dead investment and is ruining Indian economy. But it is not that simple. These farmers pawn gold to get temporary crop loans when they need funds for seeds and fertilizer etc. Almost every Indian Bank advertises for gold loans. There is a huge shadow banking industry specializing in gold loans. In every bank branch there is a gold valuer who sits at the branch or immediately arrives there when the manager calls. So basically Indian families use gold as reserve currency. It does not seem to be a dead investment at all. When you take a gold loan they do not even do a credit check as the loan is fully secured. So people with poor credit do keep some gold in family. Banks approve gold loans in less than 5 minutes if the valuer is sitting on the premises. The loans are simpler on documentation and have very standard repayment cycle of 1 year and interest is charged on outstanding every month. This one year coincides with the agricultural time line. Several shadow banks that specialize in gold loans here are multi-billion dollar companies. Wedding is the time when most Indians buy gold for gifting the bride. Wedding season starts at he end of January and ends in May.
Besides this, there seems to be interesting discussion. I will follow this thread as I myself trade silver on MCX.
Besides this, there seems to be interesting discussion. I will follow this thread as I myself trade silver on MCX.
I knew about the wedding part, but not the farming part. How much is silver used for barter in India??
Golds action tends to react about every 10-15 years. Instability and inflation worries usually trigger big moves. Otherwise, it floats like a butterfly...
Neither silver nor gold are used for barter as such. Gold is used for obtaining quick loans. That's all. Silver does not carry any security value and so there are no silver loans. Silver is used largely for making several home utensils like plates, vessels, tumblers, oil lamp holders, statues/figurines used for prayers etc. Most Hindu homes have (pooja)prayer rooms. In those rooms, most utensils plates and containers for offerings/ pedestals etc. are made of silver / brass/ copper/ bronze etc. Prosperous families have more silver and gold instead of copper or brass in their prayer rooms.
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Gold Friday was encouraging, one of the better sectors performing, the drop on 29th March is typical of gold's behaviour, will often do a fake out move prior to a move in the opposite direction, one of the reasons gold is difficult to trade, there are numerous fake shakeout moves that come from this actor to give you a fright, seems to have pleasure doing this.