Time to Sell Gold

At times like these conservative modes of investments are grabbing investor attention and gold certainly has been every one's historical favorite. RBI has now allowed banks to accept gold in any form from the public and pay interest on it in a bid to reduce the country's dependence on gold imports. The recent slump in the equity markets is another reason why Gilt and Gold investments have picked up.

But gold has probably overshot more than it can digest and would see a steep correction in the coming weeks. The yearly gold rush cycle starts in mid September and goes on till mid February (A little after the Chinese New Year). This year's cycle ended around the 19th of February 2009 and in less than 2 months, gold has appreciated by 32%. GETFs shooting down is another sign of this. So right now would be a very good time to book profits and exit any short term positions in gold. Post correction, it can be gathered again starting mid August till early October.