Gold Bullion: After weeks of tremendous selling pressure
Mumbai-India (Aug 15) After weeks of tremendous selling pressure, gold staged a resounding comeback from its multi-year low during the holiday-shortened trading week as jewellery traders and retailers ramped up demand ahead of the peak festival season. The yellow-metal broke its seven-week descending trend - longest retreat since 1999 - and witnessed a spectacular rebound to revisit the psychologically significant Rs 25,000 milestone following frantic buying at low levels in the face of a firming trend overseas.
Highly positive overseas sentiment as an aftermath of the China's dramatic devaluation of its tightly controlled currency and subsequent sell-off in financial markets worldwide mainly provided positive impetus for the turnaround in precious metals. Jewellery stockists and retail buyers seized the opportunity to restock gold in anticipation that the demand will improve considerably in coming days ahead of peak festive season as well as wedding-related demand. Depreciating rupee value in the midst of escalating currency war in the Asian region, further buoyant the sentiment.
Gold has been under intense panic selling pressure in recent weeks and witnessed a near-term rout amid a flash-crash worldwide on strengthening dollar in the midst of Fed rate hike fears. The yellow-metal had crashed to a four-year low of Rs 24,590 during the July meltdown. Elsewhere, silver continued its strong recovery momentum and recaptured the key Rs 36,000 benchmark on heavy speculative demand along with strong industrial demand.