After years of attracting strong demand from fearful investors, a crash in gold prices on Monday caught the financial world on the hop.
In London the price was officially "fixed" at $1,395 per troy ounce, down 9.2% from Friday. Eight hours later on the New York market, the price for immediate delivery was down 9.1% from Friday at $1,365 an ounce. Most other commodity prices fell in gold`s wake. By Monday evening Brent oil fell below $100 a barrel for the first time since July 2012.
The sudden collapse of gold left brokers and bloggers scratching their heads for explanations. Whatever the cause, it must be big to have such an impact. And gold`s special place in finance means there will be repercussions.
This is another marker of the fragility of financial markets, as the chosen strategy of quantitative easing fails to revive the real economy. It serves to remind us that the world economic crisis is far from over, just as the Cyprus bailout did for the eurozone. There has already been a steady decline since 2011 in commodity prices, in which eight years of "supercycle" have surely ended. As commodities are physically traded products, they are a better indicator of the real state of the economy than this year`s stock market bubble.
Speculation on the cause of the gold rout is rife. It seems to have started in a big placing of "short sale" orders in New York on Friday – said to be either 400 or 500 tonnes, depending on the source. This is not actual gold but contracts for future sale. Nevertheless it is a huge amount, each tonne worth around $45m on Friday morning.
Who did it? Paul Craig Roberts, former US assistant treasury secretary, asserted it was a "concerted effort" by the Federal Reserve to "scare people away from gold and silver by driving down their prices" and get them to buy dollars instead
. A more prosaic explanation was that a hedge fund wanted to force prices down
.
Alternatively, Italy`s central bank was selling, prompted by Cyprus`s decision to sell 10 tonnes of gold reserves after the bailout. Among Asian brokers it was linked with Japan`s recent decision to embark on its own form of quantitative easing.
There had been warnings in the air. Before Monday`s sell-off, gold prices fell 13% this year, and its sister metal silver by 20%. Last week influential banks including Goldman Sachs recommended investors to sell – also a co-ordinated move by the Fed, in Roberts` view.
Meanwhile, the Bitcoin virtual currency`s price
 rose 10 times to $130 from the start of the year – another sign of investors` reluctance to hold conventional currency assets.
The gold bugs
 – who think gold provides a more real basis of value than currencies created at the flick of a switch – see the price fall as an opportunity to buy gold more cheaply. They have suspected many official conspiracies to force prices down during the metal`s meteoric rise from $260 per ounce 12 years ago to $1,747 in October 2012. ByMarch 2013
 the London price fell back to a monthly average of $1,593.
However, it is salutary to recall the last big boom and crash in gold and silver prices. It immediately preceded the commodity price collapse and recession of the early 1980s.
Although history does not repeat itself, the financial and real economies are more connected than they seem. Then too there was a big global debt overhang and the Fed was desperate to retain confidence in the dollar. There are good reasons to think this gold price fall could also presage worse to come.

http://t.in.com/0yRI

below is the reason for falling comodity prices across the globe. fall in imports resulted fall in these comodity demand from chins. the q is how india will benefit by the falling comodity? people can say falling comodity prices can help to reduce our cad. are we going to consume these comodities for our own consumption except crude and gold? do we have any plan to improve our exports by utilising the falling comodity prices when EU import are already falling?

"Hum jahan khade hote hai line wahi se shuru hoti hai".Wondering Why I Said this line.

Our Mkt has hardly moved 100+ Points after Commodity crash.With so much improvement in Macros and expectation of rate cut,the Nifty has min 10% upside and Max of 20% from here ,which will life time high.Commodity Crash and Rate cut will increase Margins of companies.FY14 will be one of the best result year as we come out of 4 yrs of margin contraction.Its just a lack of Confidence and Sentiment in Mkt. Generally Retail investor Confidence and Sentiment comes back when Mkt has already hit life time high and as usual Missed the BUS. Finanlly Be first in investing and say the first line.
These are assumption,so take your own decision on investment

"Phele Aap Phele Aap Ghate Ghate Kahi Gaadi Na Nikel Gaye".....

LONDON--Imports of goods into the 17 nations that use the euro fell in February and exports stagnated, the latest indication of poor consumer and business demand within and without the crisis-hit currency bloc that could prevent its economy from rebounding this year.
Trade figures Monday from Eurostat, the European Union`s statistics agency, showed imports on a seasonally-adjusted basis fell 2.1% in February from January, while exports inched up 0.1%. The steep fall in demand for goods inside the bloc prompted its trade balance--the difference between imports and exports--to show a surplus of 10.4 billion euros ($ 13.6 billion), the biggest for any February since 2004. In 2012, the surplus for February was EUR1.3 billion.
Consumer demand in the euro zone has been suppressed as the fiscal crisis has spurred governments to rein in spending and raise taxes, damping economic activity and causing job losses to rise. With households, businesses and governments all reluctant to spend, euro-zone leaders have pinned hopes on exports to other countries to pick up the slack and fuel a recovery. But exports have faltered due to weak growth and demand in some of the bloc`s main export markets.
The lack of prospective sources of growth for the euro zone led the European Commission, the EU`s executive arm, to predict in February that the economy will shrink 0.3% this year....
http://t.in.com/fyQb

Copper has breached its 2011 support and is heading down. In fact all commodities seem to be breaking strong supports. A depression is predicted for Europe. Now how will it translate for India? Cheap commodities are great and we can build our infrastructure but a depression or even continuing recession in Europe could hit US, China and rest of the world economy and can impact money flowing into India. So falling commodity prices need not help Indian stock market -- unless India is "rediscovered" by global investors as the only economy that benefits from a global recession.

Strange, unrealistic bull markets can develop and surge without fundamentals, from the ashes of despair. Like the technology boom of 1999. I am not predicting one in India. But watch out for high volumes. if institutions are piling into India even as the rest of the world falls to pieces, we should not wait to pitch in.

As I always say, volumes, VOLUMES is the key.

Dear Sanjay,some tech about rec please.regards

Dear Sanjay,some tech about rev please.regards

Jain is good above 65.05 ... Indian hotel is good above 56.85 and Rpower is good above 72 .73.25...75.28...79.70


Sanjay

Please do not Re-post.we do not need this "Drama" again.

I had posted that I am still here till I get my 2 trades back in green.


Sanjay

that`s a nice way to start with. We had(hopefully have too..) KK ji, who wish to start something like this.

regards and best wishes. we will be with you..

So SGX Nifty is down some 35 points.

What happened now. Only two things i know of are :

1. Obama gave some petty spending cuts?

2. FM said Mauritius should not be preferred route of investment.

Both have their implications on FII flow to India.

Am i reading it correct?

Good Morning.

if time permits please try to provide information on Larsen, Airtel, Reliance and Reliance Cap.

You should ask these questions to the Communists and not to me? Anyway it may help if you elaborate on the facts on which your questions are based.

Charts updated for Nifty, Hindalco and SBI

Though Apple is in complete bear territory, I started with it because technically, I consider it to be the pinnacle of herd behavior and fundamentally, the best business to own. The volume is so huge that it is like almost the whole world trades on Apple. So, there is bound to be herd behavioral and that is where Elliot Wave theory is good at.