Atrump Games

Atrump Games
Atrump Games

India Government Drive Against Black Money - International Gold Price Bound To Correct

GoI initiative to eradicate Black Money, Corruption Terror funding through discontinuation of 500 & 1000 currency bill impacted the Gold industry the most. The lust of Indian citizens towards Gold and favorite holding product by the Black Money hoarders forced untracked sector to import around 1000 tonnes of Gold in 2015 followed by $35 bn outflow of foreign currency.

GoI also reignited the holding limit of Gold where married ladies, unmarried girl & Male can hold 500 gm, 250 gm &100 gm. I call the initiative Gold rationing and if we assume a family of 4 with two daughters then Gold holding per family will limit at 1.1kg per family.

So called rationing on Gold as well as recent raids on jewelers by different government agencies sent shock waves across Gold ecosystem.

India and China are top two importers of Gold and huge demand from both the countries keep Global Gold price stable as supply of Gold gets absorbed easily. The sudden fall in import by India will lead to oversupply of Gold in International market. The slower financial state of Middle east, Russia and Europe won't help to absorb inventory which will be generated by low import by India. The recent indication by US fed  regarding rate hike during Dec 2016 review will add  move trouble for Gold

The above will create panic selling in International Gold Exchanges and will speculate 10 to 15% correction in next six month.
Share on Google Plus

About Devendra Prasad

20 years plus industry veteran of domestic and international ICT domain with the expertise in Business, Technology, Strategy and Analysis. Specializes in forecasting impact analysis, trends and recommendations for Investments, Technology and Regulations.
    Blogger Comment
    Facebook Comment


Post a Comment