``It requires to have a foreign line of credit for the bidding, however some leading importers managed to put their bid through canalising agencies, it is rumored in a closed club of some importers. If the rumor holds any water, it indicates violation of banking laws. The Indian bullion trade has become truly global, after the COMEX, now it's turn of physical trade'' quipped an insider.

``As far as bid is concerned, it defies the logic. Gold can be imported under a special import license or through canalising agencies. As margins are wafer thin, most of the imports has been carried by canalising agencies only. What drove them to UK's auction simply baffles. The bids were made throughsome highly aggressive banks including a leading private bank which made a significant dent in the gold banking in western India, ``said a senior banker.

In a bid to get business, some banks pooh poohed the lows. Banking authorities also do not bother much, as long as there is no gross violation. Bid apart, the bullion trade needs through investigation by banking vigilance, he indicated.

Meanwhile domestic prices showed some curious signs. Despite the fall in the global prices, local prices managed to hold the price line. It fell for a while, but recovered immediately. On the day of auction, gold prices in Ahmedabad, the bullion city, ruled much above the landed cost, contrary to the normal business practice. While landed cost arrived at Rs 46,600 per TT bar, local dealers were quoting Rs 47,200-47,500 a bar. Normally it would have been Rs 46,800-46,900 a bar.

For the first time in the recent past, local prices failed to reflect global trends. It indicated that either local dealers were too desperate tohold the prices, or their general perception was bullish. When asked about such a higher selling price, a retailer said that landed cost comes at Rs 47,000, while Rs 200 has been added as a profit, the cost comes to Rs 47,200 per TT bar. The reply seems unconvincing.

Though the prices are languishing around 20 year's low, the fall is likely to continue for the near term. Technicals suggest that mega bear market has yet some steam left.

According Eliot wave analysis, at present gold is passing through the downward impulse wave C. It started around 280 and as of now, we are witnessing third sub wave. The C wave could end in a five or eight sub wave. After the end of C, a corrective fourth wave D would bring some recovery. Which could lift the prices to test 268-270. Then the last impulse wave E would start. It would be swift and likely to prompt the final sell off. Market should bottom out somewhere near 200-225 a oz, it seems.

Though the technicians are still bearish for gold, some contrarions have theirown view. According to this school, further fall would lead to mine closure. Some south African mines have announced shutdown plans. Some marginal mines have already closed. If prices fall further it will force others to follow the suit. At the current prices, only large producers seem relatively comfortable, but they would also feel the pinch, if the price falls further.

At present supply is exceeding demand. While most of the supply comes from mines, sizable stock comes from above ground stocks like Central Banks and government treasuries. This supply will dry up once Banks's reserve reached at targeted level. The banks which have sold out their gold may not be able to get it back, if price rallied. The huge carry trade and short positions could ignite a sharp rebound, if futures buyers insists for delivery. All the gold that has gone out from the banks coffers might have fallen in the strong hands, say the Indian buyers who normally keep off from gold sale. The yellow metal might have lost it'straditional status of a safe asset, nonetheless it is the only metal which has universal acceptance. Having an asset class of it's own, gold is down, but not out.