Gold has been thrashed during last few weeks with a brutality usually not seen in the financial markets. A violent rally in the US dollar has pushed the yellow metal from a high of $988.30 during mid-July to $800 during this week. The drop has sent the price far below 200DMA levels, a not-too-common occurrence during the course of past seven years. Obviously such action has unnerved even the die hard gold bulls. Some have become so frightened that they are talking about prices as low as $680 and even $600. Some have taken an oath not to return to the gold market, indeed many are not left with enough money to make the return meaningful.

Gold has not been the only thing on the anvil. The whole commodities complex has been run down; from crude oil to natural gas to wheat and lead, everything has been flushed by the resurgence of the dollar. This has obviously led to doubts about the commodities bull run coming to an end. Many people have come to feel that the "things" bubble has finally burst, that the seven year long rally has reached a pinnacle, and that the world is on the cusp of a new era of cheap commodities and upwardly mobile stocks. Many are even betting the future of commodities as an asset class is over, saying few investors would ever care to return to the trading pits in Chicago, Comex and Nymex.

After my last two articles regarding the impending fall in Indian gold consumption, there has been a flurry of emails. Frankly I am surprised by the response. I did not know so many people out there would be interested in Indian gold consumption. Now I stand corrected.

Since it is difficult to give response to so many individuals, I would try to address them openly. It is easy to do so since most of the emails are loaded with common questions like "Wouldn't the agriculture economy pick up soon?", "Why does Indian economy look suddenly so bad?", and "Wouldn't the Indian stock market rise soon to its former glory?"