Nowadays routine gold – silver buyers and sellers are in big turmoil especially in countries like India, where most of the traders run business in traditional fashion. The price tracking methods of these traders are very poor hence they are unable to rationalize the price movement of the precious metals and as an upshot they incur huge loss in business. The business and trading of precious metals has become highly arduous and full of intricacies, therefore traders require either high – tech enabled systems or advisors to stay in the business but sadly this is beyond their reach.
The small traders do not understand the various multi – dimensions of price movement viz. economies, investment demand, sovereign currency and safe haven demand. The prices of gold heading for $2000/oz and silver prices also all set to test $50 levels. Given the fact that the beta or market volatility of prices has knocked record high level and the money of small traders is diminishing day by day. The situation becomes grimmer in case of those who know about Morning Stars and Evening Stars (candle stick patterns) because they are unable to defeat the emotional tide or presume the Japan’s earthquake or Obama’s mind. This shows the uncertainty in the system which affects the prices of precious metals so as small traders, who cannot withstand the high variation in price in short span of time and as an upshot the incur small to huge loss.
Back home (India) the prices of gold and silver heading for record INR 30000/ten gram and INR 70000/ kilogram respectively. The small traders generally known for jewelry making and bar trading have suffered due to wrong assumption of prices since the don not have access to the bunch of knowledge holder firms. People only knows that the neighbor dragon or China is consuming this stuff more and more hence prices are shooting up but unfortunately they are unaware about the grand daddy united states of America’s financial turmoil and poverty of European countries. At present the most of the stock markets in the world including India have given up 10 -20% from their recent high levels and still looks vulnerable but the interest rate hike cycle nearing its high emerging markets looks some investor attractive even though devil form of inflation looming large over the people’s pocket especially in India inflation still hovering around double digit. The only hope for countries like India that if gold moves further up the crude oil prices may settle at comfortable level preferably in seventies, due to worldwide warranted scenario of poor economic growth.
Hence forth the small traders are advised to trade or deal in very cautious manner to avoid self fiasco in the volatile markets. They should feel well advised or filled with sufficient confidence to trade or making any kind of deal especially in precious metals. In addition they should develop their own system for trading as well as for business. Try to stay in the market as long as possible. I wish you best of luck.