Recently the price of gold seems to be under pressure, showing a decline accompanied by high volatility. Two major reasons have been cited for this downward trend:

It's a knee-jerk reaction again.Back in 2008, when the financial crisis unfolded, we saw similar initial reactions from the financial community bringing in a sell off in gold along with other asset markets.

Gold began its bull run in 2001, and a noticeable pattern of this run was the consolidation phase post the attainment of a peak. Presently the price of gold seems to be in a correction / consolidation phase post their peak at $1226 levels.

India has been the largest consumer of gold. The motive behind buying has always been savings or investments as gold is considered a perfect store of value and a lender of last resort. Jewellery purchases usually constitute about 60-70% of the total, while the rest is accounted for by coins and bars which are sold at a premium of 5- 15%.

Well, there have been many who recently concluded that the 'bull run' of gold is drawing to an end. They obviously drew their conclusion from the correction mode that the price of gold has moved in to, after setting a record high at $1226 per ounce. There have also been some who were of the opinion that gold was in a bubble which has now popped and hence the price of gold should decline further.

"Can somebody explain that, if all gold ETF's track the same gold price, how is it that returns of the Quantum Gold ETF are at the bottom of the heap? Is it because the expenses are abnormally high?" asked an email.

Sure, gold can hit the Rs 20,000 per 10 gm mark. At any point in time, the price of gold in Indian rupees is a function of the price of gold expressed in USD (the base currency for pricing gold globally)...

Gold has broken the USD 1,100 barrier, and many chartists and technical analysts now believe that its momentum at present looks unstoppable. The purchase of 200 tons by the Reserve Bank of India - a respected and conservative central bank - has only contributed towards lifting this sentiment.

"Should we buy silver?" asked the email, "It is doing better than gold!" Recently, due to its stupendous performance in the near term, there has been an increasing interest amongst investors to allocate money to silver.

International Monetary Fund (IMF) announced on its website that India has bought 200 tonnes of gold from a total of 403.3 tonnes that they had planned to sell. This transaction was completed during the period of October 19th - 30th 2009 with daily purchases at the prevailing market prices.

The US stock markets have risen more than +50% from their lows in a short span of 6 months. Quite a performance for a country that has been hit by one of its worst financial crises.

I read an interesting article by Jeff Clark that said, "What if everyone wanted a one ounce gold coin?" Hmm, that is an interesting thought.

There must be something about this shiny shimmery metal that’s keeping its worth moving up. If you thought this commodity was already performing well, brace up to hear the latest update

Gold prices in Indian Rupees are currently trading at 15,000 per 10 grams. Though the price of gold is lower than the record price of Rs. 16,119 per 10 grams set on 24th February 2009, the price of gold is 54% higher than its 5-year historical average of Rs 9,765 per 10 grams.

A lot has been talked about the unprecedented money supply growth and its eventual translation to inflation. In History, there have been episodes of currency crises in different parts of the globe on account of run away increase in money supply resulting from printing more money.

Barrick had forward sales of 9.5 million ounces. At $1000 per ounce gold price, Barrick has a mark to market loss of $5.6 billion dollars

According to an article in the Business Standard, 74% of the people surveyed said they prefer purchasing gold and gold-related products at these current price levels.

The Finance Minister delivered what could be a called as an "aam aadmi" budget. The stock markets were disappointed with the budget as it did not include big announcements to further the "lets buy now" sentiment.

In the last one year, the U.S Federal Reserve has spent hundreds of billions of dollars in trying to rescue the US economy and restoring liquidity to the financial markets.

With stock markets rising, should investors no longer buy gold?
Or if they own gold, should they sell gold - and put all their money in the stock markets?