Gold ready to crash to $600 an ounce with Indian gold import down 80%
Sandra Simons
Mar. 18, 2008

The gold market may have seen its best this year. Gold import in India and China has slumped over 80 per cent year on year as record prices have scared buyers in Asia and left them to helplessly watch the blistering rally that shows no signs of abating.

Markets move in cycles. The technical scenario in gold has turned bearish with severe momentum divergences. A sharp rally in US Dollar and a crash in gold and other precious metals markets are imminent.

The latest World Gold Council (WGC) report showed that gold imports by India declined 72 per cent to around 24 tonnes in January this year following a 67 per cent decline in the quarter ending December 2007.

Similar reports are also emerging for other Asian nations especially China. The gold bull market was fueled by the stoppage of gold selling by European Central Banks and heavy demand from India and China. Gold also reflects the overall world budget deficit. United States and Indian budget deficits are the worst. Gold price against US Dollar and Indian Rupees has gained the most in the last seven years.

But things are changing. Neither McCain nor Obama will support ruthless spending at the cost of budget deficit. India has started learning the lessons.

Interest rates in the US are sinking very fast. Soon it will be close to zero percent. As the overall stock markets in the world start improving with a major rate cut by Fed today, gold will see (perhaps has seen) the best for a long time.

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