Indians love gold. That is one thing all individuals,whether men or women, of any religion, of any education level, of any politicalbias agree on. Gold is not only a rationally thought-out investment, forwhatever reasons, but also an emotional artifact, often passed down fromgeneration to generation, usually in the form of jewelry. The attraction to theprecious metal gold is however not a monopoly of India.
Till January of 2020, the prices of gold remained range-boundaround 33,800. Then till July 2020, went up and down to find its range around 42,000.This pause-and-high was expected by the retail investing community and probablydid not surprise most people.
What happened next and is currently being played out hasleft many puzzled and confused. The gold went on to exceed 51,000 in September2020 and the higher prices were rejected by the sellers. The rejectioncontinued till around 45,000. The opposite attempts to bring the prices down toaround 39,000 were rejected by buyers on three different occasions.
Now, the trend seems to be that of a gradual but controlleddecline. The institutional participants in the market have made their agendaclear. For now, they won’t allow the price to go above 51,000, and they won’tallow it go below 40,000.
It is the author’s view, which is not any investment adviceand is for only for educational purposes, that a retail investor may exit his positions.In case the prices keep on falling, then they may buy around 40,000 to sellback around 43,000. If the prices go below 38,000 then the positions need to be exitat a loss. Likewise, if the prices start going higher, then if they go higherthat 46,500, then they may buy and sell back at a little below 48,000. In thiscase, if the prices go below 42,500, then the positions need to be exited at a loss.