The gold and silver prices were lower than the previous Akshaya Tritiya which tempted many customers to place orders in advance to receive deliveries on the auspicious day.

Industry estimates suggest that customers purchased 20-25 tones of gold as jewels and coins on this auspicious day. Trade numbers for April informed that exports grew for the fourth consecutive month recording a growth of 1.6 per cent but a more than doubling of gold imports worth USD 7.5 billion from UD 3.5 billion pushed up the trade deficit to USD 17.7 billion. Since there is a mad rush in India to purchase gold now, let us check if it is the right time to buy gold jewels.

In our one of our previous newsletters we informed that the gold coin collectors can use the opportunity to their advantage using SIP (Systematic Investment Plan). However, in the same newsletter we informed that investors should postpone buying the gold jewels or taking bullish positions in the gold future. Yesterday the prices of gold moved up owing to good news from Bank of Portugal Governor Carlos Costa. Interestingly, Portugal will not replicate a deal that allowed Cyprus to sell its gold reserves under its bailout. Despite the good news Gold did not sustain at higher levels and it has been knocking down the $1420 mark for several days in a row. Despite a huge demand from the Indian consumers, the Gold has been exhibiting a dead cat behavior which clearly informs that the demand is not sustainable. Under this condition we expect the gold to go down below $1400 in a short span of time and one will have to check if Gold can get supported at $1320 where it got supported recently. Incidentally $1320 is a 2 year low water mark and in case it breaks this support then bears will force the bulls to sell their shirts. Below $1320 Gold will experience a free fall, but above $1475 bulls and bears will have equal strength. Bulls will command respect above $1640 which means it is a long way for the bulls to come back into the game.

Coming back to the Indian stock market, there is nothing much to add. At present the Nifty has support at 5950 while a resistance is at around 6130.  Nifty will be in a super bull phase once it crosses 6358. Bears will command below 5900! Below 5600 it will be bears game.  Let us wait and watch the show.