Gold prices have been the barometer of the confidence of the investors since long. It has always been a safe haven for the investors. Gold prices are volatile whenever the global economy is fraught with uncertainties. The recent financial crisis of the European Union countries and the subsequent spike in the gold prices is a case in point. The prices in the futures have by far moved in tandem with the seasonality of the Spot market. The peaking of the price in the months between July and October or the dip in the prices towards the middle of the third quarter has been the normal pattern.
The details of Indian market analysis also reveal a more bullish outlook for the yellow metal. As per an estimate about 18,000 tonnes of gold in India are held by households. Indian gold demand has grown 25 per cent despite a 400 per cent Rupee price rise in the last decade. Gold demand is strong and is expected to increase 30 per cent by 2020. By 2020, cumulative annual demand for gold in India will increase to in excess of 1,200 tonnes. India's rapid growth, which will have significant impact on income and savings, will lead to more gold being purchased by almost 3 per cent per annum over the next decade. Indian growth is expected to be around 10 per cent GDP in the next decade, which is sufficient to support the bulls in the investment world.