Gold hits 19 month low!

Indian Gold futures hovered around it's 19 month low today, boosted by a Stronger Rupee and losses in the Global markets.

The morning session witnessed price of MCX gold down around Rs.270 at Rs.25497/10grams, while the Rupee was trading around 53.82/USD. With a stronger rupee, a strong slide in the price of yellow metal is seen.

India is world's biggest buyer of Gold, which the government considers as a dead investment piling up a record-high current account deficit, hence barring economic growth. Government has taken a lot of measures to minimize gold import in India, raising the import duty on gold by 50 percent to 6 percent this January being the latest move. However, such measures would be restricted in the future to avoid gold smuggling.

With festivals like Akshaya tritya and wedding season around, today's gold movement is certainly an invitation to Indians to invest in the so called dead investment. Gold demand is surely going to rise due to this major dip in Gold Price in India today.

Price rally affecting Indian gold imports!

Revelation by delegates at a major conference on August 24 about Indian gold imports to fall further this year holds much ground. According to reports by the World Gold Council, it fell to 131 tonnes or 56 percent in the second quarter. The fall is all because of global gold prices being driven higher by the weaker dollar and surplus cash in the market. Prices of gold have more than doubled since 2008, restraining purchases from price-sensitive Indian buyers.

As of August 24 statistics, gold prices, exhibited its biggest weekly rise, an uptrend by 3 percent since early June. No wonder demand in China for gold is increasing; this may trigger gold market to peak at $1,800-$1,850 an ounce by the end of this year. Gold is seen by the government as a dead asset, hence encouragement to the masses to spend on other Indian goods and consume things in India.