There is a sudden gold rush in India and Dubai as the prices have plummeted to new low.

The long queue in the Kerala and Chennai outside the major gold shops blocked the traffic for more than 6 hours suggests that residents squeezed out money from the monthly household budget to cash in on the dip in gold prices. Some of them took loans to buy the yellow metal which helped most jewelers in the city to record robust sales. South Indian jewelers face acute shortage of Gold coins. The Centres, including Coimbatore in Tamil Nadu and Thrissur and Kochi in Kerala are facing major shortage of gold coin!

Is it the time to buy gold now?

We expect some more fall and gold may stabilize between $1200 and $1500 in the next 6-12 months. We do not expect the yellow metal to shot up in a jiffy which means coin collectors may use the conditions to their advantage. However, traders in the exchange should exercise caution and may wait for some more time to get proper signal from the technical side to enter in the long side. Gold may not surge up wards to cross the earlier highs in the next one year or so. One could take a call on buying gold in dips and there is no hurry to participate in the gold rush now.

What to expect from the market now?

The Nifty is in the bullish range and the next resistance is placed at around 5950. A minor resistance for the Nifty exists at 5850!