After reaching $2073 high in August, gold kept correcting until it reached $1765 in the last week; i.e. being in a correcting phase for nearly 4 months and loosing 15 percent of its value from the high.

With high on forex reserves, markets were under the impression that RBI will sell dollars and not let the rupee depreciate to the extent of 77 and above.

From forex swaps instead of its traditional bond purchases to embracing an ‘Operation Twist’, the RBI is pushing the boundaries of conventional central bank policy to improve rate transmission, spur credit to the economy and keeping rupee stable.