India's demonetization move and the possible curb on gold imports may exert a downward pressure on prices. Being the world's second largest importer, any negative development from the nation has the potential to torpedo the bulls. Technicals are suggesting that even if the price was to head lower, a technical rebound cannot be ruled out. Short-term relief is seen near $1140 with Aurum already oversold.

The demand from Indian population will stay weak for the next couple of quarters at least, continuing the trend of the first 9 months of 2016, which have seen sharply lower imports. The total imports for 2016 are forecasted to slump 60 percent.

I personally do not believe that the Indian government will go as far as banning the gold imports significantly, albeit a minor curb can be expected to act as a deterrent to those hoarding black money.