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By Deepak Rangan, Commodity Online
Gold and Silver prices at the MCX for the first half of 2011 has moved
in absolute co-relation to international market, showing clearly that
Gold and silver prices are affected fully by global developments. The
daily charts of the metals highlight the concept of one world, one
economy, and the idea that every economy is linked and dependent on
every other economy.
Gold is primarily an asset class, a store of value. Investors stock on
gold when economies are unstable as is the case today. The money flows
from riskier assets such as stocks, real estate and government bonds
and into the metal.
According to 2010 data, Indian share in global Gold consumption was
36%. Considering that over 99% of the gold has been imported, India has
to pay the international rate for its imported gold. Therefore, it
should not come as a surprise that both the charts look absolutely
similar.
The gold markets fell
on Friday, retested the recent breakout, and then rose – just
what a bull would like to see. This makes sense as the world is
starting to lose faith in a lot of paper currency, and starts buying
gold and other hard assets. The measured move from the rectangle we
were in sets our next target at $1,625. We don’t sell gold. Ever.
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