India's fondness for gold is well known. The demand for yellow metal has increased so much in recent times that government had to take steps to curb gold imports in order to take care of widening current account deficit (CAD) and depreciating rupee.
As today's chart shows the demand of gold increased substantially in 2010. Increasing gold demand started putting pressure on Indian rupee and CAD. Hence, government started intervening by increasing the import duty on gold. Recently, RBI also made it mandatory that any import of gold could be made with only 100% cash margin. This is likely to put further restriction on gold imports.
It can be seen that post 2010 the demand for gold has been on a downward trend. And with government and RBI taking steps to curb gold imports we won't be surprised if the total demand in 2013 turns out to be lower than 864 tonnes as witnessed in 2012.
As today's chart shows the demand of gold increased substantially in 2010. Increasing gold demand started putting pressure on Indian rupee and CAD. Hence, government started intervening by increasing the import duty on gold. Recently, RBI also made it mandatory that any import of gold could be made with only 100% cash margin. This is likely to put further restriction on gold imports.
It can be seen that post 2010 the demand for gold has been on a downward trend. And with government and RBI taking steps to curb gold imports we won't be surprised if the total demand in 2013 turns out to be lower than 864 tonnes as witnessed in 2012.
| Data source: World Gold Council & Rediff |
Posts
No comments:
Post a Comment