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Sensex and Gold price


Date: 23 Jun 2009   Posted By: Praveena     Group: Finance and Investments    Category: Stock Market   

Why there is always a positive correlation between sensex and the gold rate?



Author: Balaji Prasad P.R    23 Jun 2009      Member Level: Silver     Points : 2    Voting Score: 0

Basic funda...

If u see the Sources to invest the fund for the investors are equity and Gold

When market goes up, Investors will be interested in putting the money in equity, hence pull out the money from the gold source and hence demand decreases, no buyers and hence the gold price falls.

in the otherway round, when market falls, investors will be interested in putting the money in gold from equity and hence the share market fall because of less buyers...


Author: KURMADASU MURALIDHAR    26 Jun 2009      Member Level: Gold     Points : 2    Voting Score: 0

Wonderful question many investors has this query. If Sensex downs the gold rate increase and vice versa this happens in the world markets also. The main reason for this is Investing in the gold is always best and secured investment in the world, investing in the shares is always volatile. If Sensex is going down and investors incurring losses then they look for safest investment sources and obviously find that Gold is best for safest investment. Then investors start buying Gold and Gold share/bonds, this makes the hike in the Gold. They pull all their money or major part of their investment from shares and start investing on the gold. In this situation the share prices comes down at their lowest levels and attracts the investors to buy them again at the same time the Gold price will be at its high. Then the investors start selling the Gold and put their investment in Shares again, this makes Gold price fall down. This is always good and healthy sign for any market.

Regards,
Muralidhar


Author: pankaj    31 Jul 2009      Member Level: Silver     Points : 1    Voting Score: 0

you can check daily tips of mcx and share markets at

http://trades-and-earn.blogspot.com/


Author: O P Sharma    29 Aug 2009      Member Level: Silver     Points : 1    Voting Score: 0

Hi Friend,
Normally when sensex is going upside, Gold prices are going towards downside beacause the investors are withdrawing money from one low earning stock exchange to high revenue stock exchange. So, sensex & Gold prices are related in inverse order.





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