After a bull-run lasting more than 12 years, gold has shown some signs of weakness in the last few months.
The minutes of the latest FOMC meeting suggest that several members want the quantitative easing to end in 2013. Continued easing by the Fed and other major central banks was one of the reasons for the bullish run in gold in recent years.
On the other hand, central banks have continued their gold purchases. The demand in China may also pick up this year as the economy recovers. The demand in India is holding up well so far, even though the metal is near all-time high in Indian Rupee terms.
In fact the Indian government is considering some tax measures to make the gold imports more expensive as massive gold imports by the country are worsening the country’s current account deficit.
I remain positive on the long-term prospects for gold for reasons mentioned here. What do you think?
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