NEW DELHI, APRIL 14, 2013: GOLD is one commodity, which never had it so good. It enjoyed the extended golden period of ruling the roost in the commodity market. But as the destiny of most commodity prices goes in a volatile world like ours, it yesterday swung into a fall mode, and the fall continued till it crashed by Rs 1250 per 10 gm. It was yesterday selling for Rs 28500 per 10 gm. Informed analysts have attributed this fall to speculative selling in the futures markets. Yesterday was equally bad for Silver, which registered a sky-fall of Rs 2500 per kg. Experts attribute it to declining demand from coin makers and industrial buyers.

Most retailers had expected that with the onset of Navratra period, there should have been predictable spurt in the market, there has been an unusual absence of warmth in the market. With marriages on in many parts of the country, most gold merchants expected the demand to firm up but it has not happened this year.

Many believe that the gold bubble has burst, finally. Internationally, the prices nosedived by 4% yesterday evening. In Zaveri Bazar in Mumbai the prices of gold and silver went down by 3.5% and the retailers expect the downturn to continue for some more time.

With the EU advising Cyprus to to liquidate its gold reserves, fresh supply to the market may further depress the market. As per World Gold Council, Cyprus holds about 14 tonnes gold. If more tottering economies like Ireland, Italy, Greece, Spain and Portugal start offloading their gold reserves, it would never be so good for the lon-term stockists, as gold prices would further crash.

Now, the question is - Does a crashing gold please the heart of our Finance Minister? Although it is to be watched what impact it may have on imports but the fact of the matter is that it would certain help soften the pressure on the Current Account Deficit, and such an event would necessarily put balm on the aching forehead of Mr P Chidambaram and the RBI Governor.