Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Focus on Fundamentals: Indian Gold Demand Surges in July

  by    0   0

Gold imports into India jumped for the first time in seven months in July as jewelers replenished stocks.

Indian gold purchases surged 44.2% year-on-year to 75 tons.

India ranks as the number two consumer of gold in the world. According to a Reuters report, increased demand, “could support global prices,” which are struggling to hold ground in a strong dollar environment.

Low prices encouraged jewelers to buy gold ahead of the international jewelry show, and many Indians may also be buying gold to hedge against a weakening rupee, according to GFMS analyst Cameron Alexander.

Analysts projected Indian demand for gold will surge in the second half of this year. Good monsoon rains should lead to a bountiful harvest and higher minimum support (MSP) for summer crops will put more cash in farmer’s pockets. Analysts expect a 25% increase in demand for the yellow metal compared to the second half of 2017.

Mukesh Kothari, director at bullion dealer RiddiSiddhi Bullions in Mumbai, told Reuters he expects imports to remain robust in August as peak festival season approaches.

Demand for gold usually strengthens in the final quarter of the year as India gears up for the wedding season as well as festivals such as Diwali and Dussehra, when buying the precious metal is considered auspicious.”

Gold is interwoven into India’s marriage ceremonies and cultural rites. Indians also value gold as a store of wealth, especially in poor rural regions. Two-thirds of India’s gold demand comes from these areas, where the vast majority of people live outside the official tax system.

Gold is not just a luxury in India. Even poor people buy gold in the Asian nation. According to an ICE 360 survey last year, one in every two households in India purchased gold within the last five years. Overall, 87% of households in the country own some amount of the yellow metal. Even households at the lowest income levels in India own some gold. According to the survey, more than 75% of families in the bottom 10% had managed to buy gold.

Indians consume between 800 and 900 tons of gold annually. Only the Chinese buy more gold. Because of its appetite for the yellow metal, Indian gold demand has an impact on the global market.

The World Gold Council listed economic growth, particularly in India and China, as one of three macro trends it sees as bullish for the gold market in the coming months. According to the 2018 World Economic League Table, India will leapfrog France and England in 2018 to become the world’s fifth largest economy in dollar terms.

WhyBuyGoldNowBanner.070815.590

Get Peter Schiff’s most important Gold headlines once per week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!


Related Posts

Goldman Sachs Raises 2022 Gold Price Target to $2,500

Goldman Sachs sees a big upside in gold raising its target price to $2,500 an ounce by the end of the year. The investment bank cites recession worries and persistent inflation as reasons to be bullish on gold.

READ MORE →

Gold Demand in India Was Strong in May

Gold demand in India was strong in May with retail sales rebounding and imports up both month-on-month and year-on-year.

READ MORE →

G7 Set to Ban Russian Gold Imports

The G7 plans to add gold to its list of sanctions against Russia. This could have an impact on the global gold market. Just how much remains to be seen.

READ MORE →

More Air Hisses Out of the Housing Bubble

As interest rates rise, the air continues to hiss out of the housing bubble. Existing home sales tumbled to a two-year low in May. Sales fell to a seasonally adjusted 5.41 million units, according to the latest data from the National Association of Realtors. It was a 3.4% drop, bringing existing home sales to the […]

READ MORE →

Where Does the Gold Go?

A few years ago, CNBC commentator Jim Leventhal made a pretty astounding comment. When asked about gold, he said he had no interest in it because gold has no uses as a metal. This is a pretty absurd statement. Gold has multiple uses. And it would probably have even more if it wasn’t so rare […]

READ MORE →

Comments are closed.

Call Now