After a successful launch of the MEX Yearbook-2011, yours truly is back amongst the mix of writing the blog. The hot topic on investors mind at the moment is –Has the gold’s bullish run come to a halt or is it a minor correction in the long term bullish run of gold. Cast your mind at the beginning of the year where many analysts had predicted that the value of gold will cross the unfathomable mark of $2000. Yet, as the first quarter draws to a close, the same analysts have slowly started to doubt their predictions with the US economy stabilizing as scores of positive data reflect the recovery nature of the economy.

Let’s have a look at the fundamental realities currently enveloping the markets. Gold has consistently been traded more as a speculative vehicle than as a risk hedge. The preceding argument is invalidated by the price action. Gold has not been traded like a hedge but rather as a speculative plaything linked to visions of it crossing above the unthinkable $ 2000 mark. Some analysts are also of the view that the gold’s bullish run will continue if the US GDP figures severely disappoints to the downside. There is also an argument that true global recovery is what will finally send gold over the moon, as monetary velocity increases faster than Central Banks decision to withdraw their support.

Many investors do not favor gold’s bearish trend. If anything the investors have made more on the long side of gold than at the short in the recent memory. And if the charts and the macro view indicate to buy gold in the coming days, the investors certainly will. After all, a trade is a trade. From a trading point of view right now, precious metals are clearly seeing a slide. But from an investment point of view, the macro view is rather dubious (unless the European meltdown takes an uglier turn or a war with Iran or some other apocalyptic event).

But the hype of the gold’s bullish run is slowly fading away, or at least sidestepping it. The bullish journey of gold is coming to a burning end, unless something can wipe out the fire and continue the long term bullish journey of gold. Till then, journey on-mystical gold!

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