HISTORY OF GOLD IN INDIA
Traditionally, the golden is deeply rooted in Indian culture and held in high esteem throughout the country. Holding gold is viewed as a standard in India and is used in countless aspects of Indian life. Hindu's are often seen adorning gold jewelry on auspicious occasions that dates back thousands of years into conventional Hindu texts. These texts portray Gods and Goddesses with gold that lead into the prestige associated with gold in modern Indian society. This significance bogged down to all aspects of lifestyle such as dowry's, capital for land/business as well as a source of wealth.
RISING CORONAVIRUS CASES
In light of this current COVID-19 pandemic as well as the rampant growth in new cases within India, gold demand has significantly diminished. Slowing economic action and fewer weddings have been significant contributors to the local gold slump. Historically, the June quarter is expected to reveal a spike in gold buys. In addition to the present diminished requirement, local constraints have stopped gold and jewelry showrooms from launching. India being the second biggest customer of silver will probably have an effect on spot gold.
A slight consolidation can be understood recently place gold prices (see chart below) but the safe-haven attraction might take over as international cases continue to rise. Together with the U.S. Dollar being a major influence on the purchase price of gold, current Dollar fatigue has bolstered gold prices together with the psychological $1800.00 amount being broken above.
The long-term downward channel has been pierced by a reassuring Dollar and falling U.S. 10-year treasury yields. Topside station immunity has held since early January 2021 in which a brief break was curtailed shortly after. With yesterday's daily cost candle closing over $1800.00/ounce as well as channel immunity, there could be scope for additional upside. The 38.2percent Fibonacci amount at $1838.60/ounce will serve as initial resistance as gold trudges toward overbought land on the Relative Strength Index (RSI).
Alternately, the move could be short -term and price action may fall below channel immunity, thus adapting to the recent historical trend. Should this occur, the well-established $1765.51/ounce support zone will supply bears with a key level to track.
Gold prices are likely the very last thing on the minds of Indian citizens but the devastating effect on COVID-19 could have systemic consequences if the mutated pressure make its way to other parts of earth. This may cause a worldwide drop in demand for gold however, the asylum/refuge that gold supplies a safe-haven metal may outweigh this present demand hindrance. The pandemic is of main concern at this stage in time and its containment will likely pave the way for the yellowish metal going forward.