What Happens To Gold And Silver Next? Look Out Below?

Regardless of what economic group Indians are in they would rather have their money/earnings in gold because of the current status of the rupee.

And its easy to obtain gold, all they have to do is go down to a bank. There are lots of very small offerings so almost everyone can afford gold with one of the lowest denominations being half a gram.

Grams not ounces!

From one of the largest banks in India' website, ICICI bank:

Does ICICI Bank sell gold / silver through ICICI Bank Net Banking and through its branches?

Yes, ICICI Bank sells 99.99% Pure Gold / Silver through ICICI Bank Net Banking and its branches.

What are the weight options for purchasing ICICI Bank Pure Gold / Silver?
ICICI Bank Pure Gold is available in 0.5 g, 1 g, 2.5 g, 5 g, 8 g, 20 g and 50g weight options. On special request 100 g and 1 kg bars are also sold. ICICI Bank 99.99% Pure Silver is available in 50g and 100g weight options.

In what variants are ICICI Bank Pure Gold sold?
Subject to availability at the branches, the following variants of gold are available;
· • 0.5 g circular coin,
· • 1 g circular coin,
· • 2.5 g oval coin,
· • 2.5 g heart shape,
· • 2.5 g Ganesh oval coin,
· • 5 g circular coin,
· • 5 g heart shape,
· • 5 g Laxmi-Ganesh oval coins,
· • 5 g Laxmi oval coin,
· • 5 g Balaji oval coin,
· • 5 g Guru Nanak oval coin,
· • 5 g Ganesh oval coin,
· • 8 g circular coin,
· • 8 g Laxmi oval coin,
· • 20 g circular coin,
· • 20g rectangular bar and 50 g rectangular

Everytime gold falls, India steps in to buy because of their currency problems.

And I see more than a few people able to buy half a gram of gold in India.

AT todays prices thats about 310 rupees per tenth gram.

Thats about 3 days wages for the average worker.

A software Engineer, for example, can buy about 10 ounces a year ( at 360,000 rupees/yr)if he or she doesn't eat, pay rent, drive,or buy anything else.

But be serious for a minute. 1/10th of a gram is 0.003 troy ounce.

...Your daily cynical moment....

The COT data is a week old when published right?

This week we learned the funds are going long again, or so said kitco.

And the funds are still not anywhere near fully divested of their holdings in the ETFs.Though they have liquidated a sizable sum.

Soooooooo, would it be possible to start to go long, then when the general public learns I/we are going long ( a week late) they pile on....happy days are here again.....and then right before the September anouncement of Fed Tapering...go short and make massive profits?

Now please don't yell "conspiracy theory". I'm a retired Detective and have arrested lots of people for criminal conspiracy. If you don't think the big boys don't do the same thing as the little guys, you're sadly mistaken. In fact laws were passed a hundred years ago because the big boys were so blatant in their Conspiracy to set prices, wages, ect. Do you think their morals have seriously changed in what is widely being touted as the "Age of Greed". In a time when I have seen headlines and symposiums that say "Greed is Great for the Economy"?

Anyway, just asking if this is possible.

jm,

Regardless of their status they are going to take whatever they have and buy gold. Gold to them is not like a luxury item like it is in the western world. This isn't a can of soda or a pack of gum or a video game consul or a new car, a piece of art, your favorite classic book or whatever you want to fill in. Gold is something very serious to them.

It is a necessity because gold plays an ancient role in their culture, especially the wedding ceremonies. There is a reason why a country that has a such a low per capita is probably the biggest gold consumer in the world. They are going to buy gold regardless of how much they make.

lolol It doesn't matter if they work the whole year and made only the equivalence of $1, some of that $1 will be put into a spec and put into a container. lolol

the point is its based on cultural traditions to have gold that dates back a very very very long time, and how much someone makes doesn't matter that's one reason why someone can go into a bank and get half a gram so people can partake in having gold when they don't make a lot.

And the $1219 estimate is rupee equivalent.

Sure, I get that it is a cultural thing. I really do. But even if they took every single penny of disposable income and bought gold; well how much can they afford. Really afford, not pie in the sky. Even if they took 1/12 of their yearly income and bought gold they still get 1 gram. So; $50 worth of gold a year?

And while I know the wedding season is the biggie. The trades all blather on about how Indian buying is sustainable and growing ALL YEAR LONG.

Lets face it the poor are going to take their $50 and spend it mostly during the wedding/festival season. Not spread out through the year. And if they do spread their $50 out through the year, thats less than $5 a month.

That's my point. There is no "Indian miracle" that is going to sustain higher gold prices day in and day out.

jm,

You realize that those poor desolate Indians account for over 30% of all the gold consumed in the world every year?

And guess who saved gold from going under $1000 a few weeks ago when we watched gold fall?

The Chinese and guess who else bought huge amounts of gold? It wasn't the traders. Actually there were a few governments, but guess who bought huge amount of gold while gold was depreciated.

My point is they are a market maker for gold.

@Jim

yes, the COT is not real time market data. There is a delay as it is published. Furthermore, the COT doesn't necessarily reflect whats really going on. As I have said many times, if the data says one thing, but price is doing another, well only price matters, because price never lies.

Its interesting you mention this today. In some interaction with other traders, they also basically have in their game book that plan you outlined- sell before or into the FOMC meeting in September and or when the NFP numbers come out this month.

So yes, its possible the perfect storm is here. A squeeze on late short sellers, a nutty month in the markets, a squabble in the middle east... (which the MARKETS DONT CARE ABOUT AND DO NOT VIEW AS SERIOUS) I use all caps to emphasize how unimportant Syria and any US action taken. You will read all about the financial media saying how the markets were rattled by comments by so and so etc etc. Fact is the market has been heavy as of late, seasonality is against it etc, so volatility should be expected in markets.

But back to my earlier point- yes, I think this "noise" out of Syria is the perfect storm to see a run up in prices and just as everyone gets comfortable that gold and silver are back, poof.

Now, it is constructive what gold and silver have done. There are trades and money to be made in this run up. However, I remain skeptical because this sort of heavy selling causes technical damage and its not resolved 1-2-3 and we are back to higher prices and everyone is happy again.

So yes, its entirely possible. Obviously gold and silver are being bought. Whos buying it? Is it real solid buying? Theres been decent volume. The price action has been interesting to see it fill gaps. I always trust price. But as these prices rise, they will run into heavy resistance.

Heres a scenario to chew on- whats to say, we actually get this gap from 4/15 filled... but it happens say on the day of FOMC minutes released and then drops from there? Then from there price reverse... again this is just a scenario. I will always respect price but my point is- it has memory and coincides with events that either propel or stop it in its track.

That is why it is best to just watch, take level by level and the full picture becomes known in time, just follow the trends until they tell you its time to hop off.

Finally, let me repeat myself- I will always respect the price action. Its really the only thing that tells me whats really going on. Price along with the element of time gives us clues and gives us a good idea of where things are going. No matter what my thoughts or opinions are, the market will always be right. If gold and silver are ready to break the downtrend and move on, then I will respect that and I;ll see it. Conversely, if they fail and start to sputter out, I'll also recognize that. Price is always truth.