Gold - Conceptual Buying Stops
If Gold used to drop more than US$ 200/ounce, everybody rush to buy the metal and accumulate it. Yesterday it happened, but no one is tempting to buy it. Every body is in doubtful position, why? What is the reason for this? Meanwhile, everyone started even to sell it more and more. Now the reason is that, we expect the more to fall.
The best reason is that Federal Reserve of United States stopped buying Bonds. When it'as stopped it, the amount which is going to pump in the world market shrinks. Money which is pumped in the world market creates demand in the market. The money which is pumped is considered to be US$ 200 - 300 billion Dollars and if it get transferred to 10 different people/institution, it will be considered to create demand of USD$ 2000 - 3000 Billion Dollars. These money will be moved more to the stock market, commodity market and some will be used to buy manufactured goods. Gold, Silver, Crude oil and other metal prices increased to the maximum. The other reason is that, when the last crash happened in April 2013, every one purchased it and less savings is left to purchase more. Third reason, India and China put forward import restriction to curb import and stop swelling of Current Account Deficit [CAD]. Import duty has been increased by 8% by Indian Government.
China, it's a different story. When Federal Reserve stopped Bond buying, Chinese market started to curb credit providing to companies and individuals. This triggered the stock market to crash, commodity market too felt the heat and corporates are fighting to regain demand. So, a credit crunch has happened in Chinese market. Selling spree has happened. Gold ETF also saw a massive selling and it has seen the metal has been more than 530 tonnes of it. This is considered to be 10% of the annual production of Gold in the world market.
Don't invest in Gold and Silver. Wait till the selling curbs. Reversal will happen, once the Dollar will be having the downflow.
The best reason is that Federal Reserve of United States stopped buying Bonds. When it'as stopped it, the amount which is going to pump in the world market shrinks. Money which is pumped in the world market creates demand in the market. The money which is pumped is considered to be US$ 200 - 300 billion Dollars and if it get transferred to 10 different people/institution, it will be considered to create demand of USD$ 2000 - 3000 Billion Dollars. These money will be moved more to the stock market, commodity market and some will be used to buy manufactured goods. Gold, Silver, Crude oil and other metal prices increased to the maximum. The other reason is that, when the last crash happened in April 2013, every one purchased it and less savings is left to purchase more. Third reason, India and China put forward import restriction to curb import and stop swelling of Current Account Deficit [CAD]. Import duty has been increased by 8% by Indian Government.
China, it's a different story. When Federal Reserve stopped Bond buying, Chinese market started to curb credit providing to companies and individuals. This triggered the stock market to crash, commodity market too felt the heat and corporates are fighting to regain demand. So, a credit crunch has happened in Chinese market. Selling spree has happened. Gold ETF also saw a massive selling and it has seen the metal has been more than 530 tonnes of it. This is considered to be 10% of the annual production of Gold in the world market.
Don't invest in Gold and Silver. Wait till the selling curbs. Reversal will happen, once the Dollar will be having the downflow.
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