Prior to Dhanteras celebrations, dent in Gold demand raises concerns on Global Gold Prices
India, the second largest buyer market for gold is likely to suppress the already low global prices of the metal. According to the World Gold Council (WGC), this year in 2018, the Indian gold demand is expected to fall down from the previous year. This majorly concerns WGC, which further worries that a fall in demand from the world's second-biggest bullion buyer could weigh on global prices.
The global prices are already down by 6.5 percent so far this year. However, the lower imports could help the country reduce its trade deficit and support a weak rupee, which hit a record low last month. While the demand in 2017 was 771.2 tonnes, it is likely to get at the lower end of the 700 to 800 tonnes range.
There are few speculated reasons that could halt the buying of the metal in India. The increased price of gold could be counted as one of the reasons. Even though the global gold rate has declined, the domestic price has risen to 8 percent. The current gold prices in India is nearly INR 33,000 per 10 grams, the highest since September 2013.
Besides gold, people's inclination towards other long-term investment assets has grown profoundly. Whenever the festive and wedding season is round the corner, it has always been expected from people to buy gold and create wealth. The buyers nevertheless have become more investment oriented to avoid losing sight of the financial goals. The attractive long-term investment options like SIP (Systematic Investment Plan), small saving schemes, and tax effective assets have become more popular among the people of current generation.
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First published: 2 November 2018, 17:36 IST