Summary
Indian Gold Import is down by 1.2ton to 1800kg in Jan09 about 93% low. And it is expected that import can hit badly this year. Gold prices may go more high. Figures shows that Market is going to a missrable situation.
Analysis
Inidan Gold import has been hit badly with a 93% downfall in Inidan figures India imports 18000kg of gold last year in Jan08 but this year in Jan09 it is only 1200-1800kg which is a very depressive figures.
Driven by uncertainty in the global financial markets and currency movements, it is estimated that gold prices are expected to touch a record high of Rs 16,000 per 10 gram in the next three months. The gold prices have shot up by 20 per cent to Rs 14,175 per 10 gram on February 2 compared to Rs 11,720 per 10 gram in the year-ago period. According to analysts, there’s a sharp fall in demand and even investors are shying away from buying gold. These high prices have led to 93 per cent fall in gold imports at 1.2 tonnes. Mr Suresh Hundia, President, Bombay Bullion Association, says, “The gold prices will continue to fluctuate till there is stability in the world economy. The demand for gold has almost dropped down to negligible levels as prices have shot to new high.” Gold prices in December moved up from Rs 13,505 for10 grams to an all-time high of Rs 14,240 on December 30.
Major jewelry manufacturers and retailers are concerned about the gold prices touching the Rs 16,000 mark. Mr Hundia says that since global financial market and crude oil are the key drivers for gold prices, Any upward movement in gold prices is determined by the strength of dollar and euro and an uncertain global economic environment.
Since the consumers are hesitant to buy gold right now, the jewelry demand has dropped by almost 40 per cent. Accordingly, gold imports by India, the world’s biggest buyer, too have slumped as prices prompted consumers to recycle old jewelry. Few buyers for gold jewelry despite the upcoming marriage season. Since the consumers are hesitant, there’s a negligible demand for new jewelry. It’s hardly anything. Most prefer replacement jewelry. All said and done, the lower demand has cast its shadow over gold imports as well. Though India recycles about 200 tonnes of gold every year, in 2008 it was down by 43 percent. “But unlike crude, there’s no end to gold. Gold is never going to end and whatever the market situation, the stock will keep growing”.
