Friday, September 29, 2006

India's Love For Gold

The yellow precious metal gold is an old obsession with Indians. Their womenfolk has an insatiable craze for gold jewellery so much so that 80% of gold consumed in India goes for it. However, the global trend currently is for the fusion jewellery that uses platinum and gold.
Gold is a favourite mode of saving too. However, the return out of saving in gold has not always been attractive as at times investments in real estate and stocks have benefitted investors disproportionately. So whenever the stock-markets become dull, gold hoarding is noticed. Interestingly, gold is also held in very large quantities in many temples which are offered by devotees. Some speculative reports estimate gold reserve in India around 20,000 tonnes.
The consumption of gold in India is the highest in the world at 700 tonnes per annum out of total world annual consumption of 3100 tonnes. The demand is also seasonal reaching the peak when festive seasons like Navratri and Diwali start after monsoon. Again, the marriage season starts coincidentally almost around the same time and goes on till May or June. The gold prices had remained weak during the last month as the prices swung between $576 to $621 an ounce. The corresponding prices in India ruling then was Rs8900($193) per 10 grams. But the ground is getting ready for an upswing in gold prices. Some analysts forecast that the international gold prices may touch $700 per ounce and it will touch Rs10,000($220) per 10 gram.
Watch out for the next gold-rush!

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