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.
