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India Gold Market Weak - Rest of World Too
Pinnacle DIgest writes: In this article, Adrian Ash explains the overwhelmingly negative sentiment towards gold. The negativity is coming from all over the world as India gold sales are down significantly, with the government implementing new tax on jewelry sales.
Obviously, European issues aren’t helping gold in the slightest, with the flight to safety heading straight to the USD. According to Ash’s article, gold will likely be range bound between $1530 and $1600 until June 17th, which is when Greece goes to the polls once again. With that stated, it appears that the country is more inclined to stay in the eurozone than leave... for now.
Spain is adding to the turmoil in Europe now that Bankia has pleaded for government support and regional governments doing the same. Spain is likely to add to its mounting public debt in order to provide the necessary crisis support.
Naturally, this news has put significant pressure on gold and will likely continue to do so for another couple weeks. It has also hurt the euro and is expected to take it down further (3 to 6-month targets of $1.15).
An interesting statistic to take note of is that the "net long" position of non-industry gold traders fell to its smallest level since December 2008 – when the Dollar gold price was trading at $767 per ounce. This signals historically bearish bets being made on gold by the retail audience (an audience that is usually wrong). Time to be a contrarian.
Click here to read Adrian Ash’s article.