to curb imports of gold on concerns about the country's current account deficit (CAD).
The Reserve Bank of India, too, imposed restrictions on gold imports for banks, such as curbs on granting advances for the purchase of gold in any form.
Finance Minister P Chidambaram had appealed to citizens to refrain from buying gold and help the government's efforts to trim the widening CAD.
Historical data show that gold has given positive returns over the last 12 out of last 15 years. Also, gold prices have appreciated by an average of 20 per cent over the last 10 years, against about 18 per cent for equities.
Marketmen said that gold outperforms equity when investors buy yellow metal as safe hedge in weak markets.
According to Dhakan: "Optimism about the US economy gaining momentum was the prime reason behind the world markets rallying as it is considered the growth engine of world economy.
"When fear trims, its greed that takes over and that's exactly what has happened. So, investors are redeeming from safe havens such as gold, US treasuries and are investing into risky assets," he said.
Gold prices have come down to Rs 30,160 per ten grams from Rs 30,990 per 10 gm, while silver fell from Rs 57,000 per kg to Rs 43,500 per kg.
The yellow metal is normally preferred as a hedge against inflation, and investors tend to park their money in gold as they consider it a safe bet in times of market uncertainties.
For the year ahead, Religare's Manglik said, "Markets like stability and elections due next year will play a major role in deciding the trajectory."
"A clear majority by any political party will set the stage for a long-term boom as it will boost sentiment and allow long-term decisions. This will also lead to more FII inflows and the return of retail investors."
"External factors affecting Indian stocks seem to be negative for the first half of 2014 due to continued strength of the US dollar and benign in the second half. By that time, elections too would have taken place. A combination of domestic and international factors point to a bumper closing of Indian markets in 2014 with double-digit percentage growth," he said.
Stock market segment mid-cap and small-cap indices have fallen by about 10 per cent and 16 per cent, respectively, in 2013.
Foreign Institutional Investors have bought shares worth over Rs 1.1 lakh crore (nearly USD 20 billion) till December 19. In