We live in the best and the worst of times. Confused? Let me explain. In the international markets, every investor is running away from gold i.e. sell, sell and more sell, whereas in the domestic market, everyone is running towards gold i.e. buy, buy and more buy. So what makes this divergence and convergence of gold so interesting is the fact that the gold market has crashed, falling from its unattainable heights to levels unimaginable in the eyes of the investors. Many credible institutions around the world, who predicted that the prices of gold would reach $2000 per ounce in 2013, are eating humble pie, thereby removing the information as fast as they can. For example, Bank of America has sent out a note, a little too late for the ardent investors, removing its much-hyped $2000 per ounce price target in 2013 citing no current technical and fundamental support for gold prices. Interesting isn’t it?

The decline in the prices of gold has raised questions about gold’s value as part of an investor portfolio. Safe haven-a term synonymous with the appeal of gold since time immemorial- has been washed away in the heat of the battle between bulls and bears, in which the bulls has certainly taken a backseat in the recent times.

But an alarm bell has sounded for the bulls to take shape and take over the markets in the ensuing days. For some investors, the bearish run is not a signal to run with the trend but a signal to start jogging the other way. Gold’s price is certainly over-hyped and over-priced in the recent days, with the bulls slowly but surely taking over the markets after the dramatic fall. When everyone is certainly on one side of the trade, there prevails a gap between demand and supply, with a vacuum of supply created. It’s this certain vacuum that investors believe will create an opportunity for a 10 to 15 percent northward move.

This opportune moment could be a silver lining in an otherwise dark cloud for the bulls of the market to rule again. Think about this. A Chinese slowdown. Deflation in Europe and USA. What’s left that could go wrong for gold?

It’s certainly a battle between the bulls and the bears of the gold market. For now, the bears are taking over. But in the ensuing days, it would be interesting to see what will happen next. My opinion is on the floor for you to ponder about. But it could completely differ from yours!

Note: This blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.