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

Indians Buying Gold in the Midst of Their Stock Market Downturn

  by    0   0

US stock markets plunged Wednesday, shedding over 800 points. Could the be the popping bubble Ron Paul recently said was on the horizon? That remains to be seen. But equities in many emerging markets have been shedding value for several months. Take India for instance. As a recent article in the Economic Times of India put it, “Asset classes are in a state of churn. One look at the chaos in domestic equities is enough to suggest that not all is well with this segment.”

So what are Indian investors doing? Buying gold.

India’s NSE equity index has fallen 7% from a record peak in August and the value of the rupee has dropped 13% this year. But as the ET reported gold sales are strong.

Away from all the glare, gold is taking spotlight — gradually. Investing in this long considered safe haven is finding many takers as the price trajectory looks set to move north. “

The flow of gold into India hit a 15-month high when it more than doubled to 100 tons in August. Demand started climbing in July when imports jumped for the first time in seven months. Analysts expect demand to remain strong in the world’s second-largest gold market through the fourth quarter. Analysts say Q4 imports could rise as much as 9% year-on-year to around 250 tons.

The price of gold has dropped in rupees as well as in dollars. But Globe Capital Market head of commodity and Forex research Tarun Satsangi said he expects the price to rebound.

Gold is likely to reclaim $1,330 an ounce mark on Commex and Rs 33,500 on MCX. Keep buying gold on MCX as and when it comes to the vicinity of Rs 28,800. If gold is held for 2-3 years, one can expect decent returns.”

The Economic Times also noted the increased gold-buying by central banks. India’s central bank bought gold for the first time in more than a decade during its last fiscal year. Kunal Shah, Head of Commodities Research, Nirmal Bang, told ETmarkets.com:

Central banks globally are buying gold in order to diversify, because China and Russia have taken an aggressive stance and are shedding US treasury holdings. So, the only way they can diversify is by putting their money in buying gold.”

Local gold futures in India have risen about 6% since a low in mid-August. Bullion wholesaler Daman Prakash said this has prompted Indian investors to look for ways to diversify their portfolios.

Rupee is consistently falling and we don’t know how much it will fall further. It is prompting investors to hedge their risk with exposure to gold.”

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.

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

Nearly Half of Small Business Owners Expect to Close Down Permanently

The economy was booming. The stock market was setting records. Then coronavirus came along and governments shut things down to minimize the pandemic. That led to massive layoffs and a nasty recession. But once states open up, things will spring back to life and the economy will go back to being great again. That’s the […]

READ MORE →

Over-Leveraged Zombie Companies Threaten Economic Recovery

There seems to be mounting optimism that the US economy will rebound relatively quickly as states begin opening up and there is progress toward a coronavirus vaccine. But the optimism ignores deep problems in the US economy that existed before the pandemic  – chief among them staggering levels of debt and the proliferation of zombie […]

READ MORE →

Silver Joins Gold at the Party

Silver has finally joined gold at the party. In the last week, the price of the white metal has moved up from $15.51 to $17.35. (as I type this on Tuesday morning May 19) That’s an 11.9% increase. With the jump in the price of silver, the silver-gold ratio has dropped from over 113-1 earlier […]

READ MORE →

QE Infinity: Money Supply Grew at Record Rate in April

The money supply growth rate surged to an all-time high in April as the Federal Reserve created cash at an unprecedented rate through quantitative easing and other money-creating monetary policies. According to Ryan McMaken at the Mises Institute, the only time the Fed has come close to this level of money creation was in the […]

READ MORE →

Staggering April Budget Deficit Just the Tip of the Iceberg

The April federal budget deficit came in at a staggering $738 billion as government coronavirus stimulus began flowing through the pipelines and revenue dipped due to the government lockdowns.

READ MORE →

Comments are closed.

Call Now