This could hurt Finance companies and Banks whose bottom lines are well supported with the pawning business. LFIN who has a lucrative share on gold pawning when compared to their other businesses to be tested in this new hostile development. Currently most of the pawning centres including banks are not accepting any new business (lending against Gold) but eagerly expecting existing customer's settlements.
Main concern of all is that of the risk factor which all private Banks who has large amount of unsettled gold loans, to be exposed them selves further in this unexpected global financial dilemma.
Further, I personally know how remote Bank-Branches depend on gold pawning business in terms of making their entities profitable.
Now time has come to think twice on investing Bank/Finance sector in CSE at this juncture, unless the prices are corrected with accord to the Risk factor.
Its prudent to expect a price decline in Bank/Finance counters in near future.
According to the information gathered from a few broker-huts there would be more selling on Banking counters as some long term investors on the selling side. As usual BBs are unaware of the reason for the selling. It could be the Gold fact which could create a correction on Bank counter or expected next ASI support level 5800 or an unknown reason which yet to know.
Unfortunately CSE does not have any listed business which deals on Gold or Gold/Jewellery which could have a positive impact with low raw materials and in return would add some positive points to ASI.
Well , in that case , there might be some newspaper articles on BLUE counter in coming days which is not bad for the market movement. But be vigilant with a "bull trap" which I foretasted in a my previous post "Sucker Rally".