Last Blast for Gold. The Rupee has a short term rally vs US Dollar.

Short term rally in the Indian Rupee vs the US Dollar, The Gold market had its largest gain in history. Gold looks to be making its final attempt to continue the bull run. It would appear that this will be the end of the gold bull. The Indian Rupee will continue to fall against the US Dollar in FOREX and futures trade.
India’s benchmark stock index fell for a seventh day, its longest losing run in almost eight months, as a US bailout of American International Group Inc failed to ease concerns that credit-related losses will cause more financial failures.
The Bombay Stock Exchange’s Sensitive Index, or Sensex, declined 255.90, or 1.9%, to 13,262.90. The index had its longest losing streak since January 22. The S&P CNX Nifty Index on the National Stock Exchange slid 66.65, or 1.6%, to 4,008.25.
ICICI Bank, the nation’s second-largest lender, extended declines to a two-month low after saying a unit holds 57mn euros ($81.3mn) in senior bonds sold by bankrupt Lehman Brothers Holdings.
“We are seeing foreign investors selling, that’s a drag on liquidity as they unwind positions,” said Mahesh Patil, who helps manage $9.6bn in assets at Birla Sunlife Asset Management in Mumbai. “Global concerns will continue to dominate as we could see more companies in trouble.”
ICICI fell 5.3% to Rs560.05, extending Tuesday’s 5.7% drop and dragging other lenders lower. ICICI declined after some analysts estimated the lender may record losses on bonds, including debt issued by Lehman Brothers.
ICICI’s aggregate losses at current spreads could range between $150mn and $250mn, implying a book value hit of as much as 1.7%, after tax, Kotak Securities analyst Tabassum Inamdar said in a note to clients on Tuesday. State Bank of India, the country’s largest lender, fell 3.2% to Rs1,530.80. HDFC Bank, the No 3, slid 3.5% to Rs1,187.35.
The rupee rebounded from a two-year low, gaining the most in almost two months, after the central bank announced measures to boost dollar supply and curb exchange-rate swings.
The rupee rose 1.2% to 46.37 per dollar at the 5pm close in Mumbai, according to data compiled by Bloomberg. It fell 1.9% on Tuesday, the most since May 1998. The Indian currency is Asia’s second-worst performer this year after South Korea’s won, with a 15.1% loss.
The currency snapped a six-day decline after the Reserve Bank of India said on Tuesday it will sell dollars and raise interest rates on locally-held foreign-currency deposits to attract money from abroad. The central bank said it plans to sell dollars through its agent banks or directly to meet demand- supply gaps after the rupee fell the most in a decade on Tuesday.
“The rupee is likely to recover part of its losses because it’s a certainty now that the central bank will supply dollars in the spot market,” said Krishnamurthy Harihar treasurer at Development Credit Bank Ltd in Mumbai.
Implied volatility on one-month dollar-rupee options rose yesterday to 16%, the most in at least nine years, Bloomberg data show
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