It has been so long since I wrote anything on my blog.
But this mad gold rush made me share my thoughts again on this platform.
When ever we open a news paper, crime section carries at least one story which has direct nexus to gold. Price rise for gold is taking crime rate also along with it. Thugs are committing crimes only for gold. And, we hear, it is easy to sell gold on the street nowadays. No questions asked. Form where you brought it, the source etc, is not at all concerned. Whether it is owned or stolen, no, no questions. As long it is gold, it will easily be sold. In one recent day light robbery, I was astonished to read, the thug has not touched silver which was also lying with the gold in the same rack. The reason, it is simple, it is easy to sell gold than silver and gold rates are high, much higher, compare to that of silver.
Why all this? What it indicates?
It indicates people are crazy to buy gold because they believe, in future, the demand for gold is going to gain momentum. The fundamentals in gold are strong. High inflationary pressures are reassuring these theories. The money is flowing into gold from all directions. We all know that the inflation pushes price up and brings the value of money down. What you can buy today for x rupees, you can not buy tomorrow because of the price rise. Only buying of gold will give you maximum returns in case of acute inflation. It constantly goes up and is the best bet during the inflation. The net result, gold rush.
Is this gold rush good? or is it the same mad rush, that has happened almost a century back in the similar circumstances. May be may be. But if one looks at the present situation, will be tempted say yes. Because, there are rumors on the street that the same forces which have rigged the stock market, earlier, have entered into gold market hence this speculation. Price rise is justified in the back drop of high inflation but not these extraordinary fluctuations. People are silently watching, wondering whether this bubble is going to get burst or is it real reflection of genuine demand.
