The weak US dollar has driven gold to over $1,000 per ounce in overseas markets and in India it has caused the price of the yellow metal (standard gold) to leapfrog in the national capital to Rs 16,200, its all-time high.
While doing so, gold has gone against the grain of two rules that normally apply to its rise and fall. One is that gold and stocks don't really rise in tandem, but that is what is happening. On both Monday and Tuesday, bourses and bullion gained tremendously, reaching record levels.
The second rule that should have kept gold prices down is the ongoing 'Shraadh' season, which is considered inauspicious for making any purchases, especially big-ticket ones. And yet, here we are seeing traders indulging merrily in the buying effort, totally ignoring cultural orthodoxy.
Driving the trend, perhaps, could be another reason, albeit a not-so-strong one. The relatively short 'auspicious' wedding season. This time the period that this encompasses between November-February, has just 24 ‘auspicious’ days in it to carry out the ceremonies. This is almost a 50 per cent fall from the normal.
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