Gold falls 20% in last month!!
Posted on August 21, 2008
Filed Under Global happenings affecting Indian Economy, Gold Investments, Market News & Discussions |
Gold was about $973 per ounce ( that is Rs:14,700 per 10 grams) on 21st July 2008 and currently it is $793 per ounce!! That is Rs: 12,032/- per 10 grams! So a fall of about Rs:2,700 in just one month!! That is about 20% down in just a month! See the graph to realise the way price fluctuated… According to Reuters, India’s gold imports in July fell nearly 56 percent from a year ago as higher prices led to a drop in retail sales, a top industry official said on Monday. Harmesh Arora, vice president of the Bombay Bullion Association said “If prices come down to about 11,000 rupees (per 10 grams), we may do better than last August,”. And they are almost at that leveks now. Also the festive season is nearing and its hard to think that buyers will wait anymore to prices to fall. You have seen a lot of surge in the global gold prices in the last 6 to 8 months but the picture is drastically changing now. I remember the last August when I bought gold jewellery, it was about INR 10,000 per 10 grams. Then it travelled to above INR 14,000 around May-June 2008 and now it has started coming drastically down. Gold has shown such cycles of fluctuations from about 600 years but the fluctuations this year are more complex to understand as it is coupled with high inflation, globally shaken equity markets, US recession, or rather stagflation. India plays a very important role in controlling the gold prices globally because India is the largest consumer of gold. India accounts for about 24% of total gold demand all over the world. As I said earlier the festive season triggers the gold buyers in India so we may look out for the rise in demand from India, which may result in rise in global gold prices.
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