subject: Gold Demand In India In 2009 [print this page] God has bequest Gold to the world as one of the most worthy gifts. It is a sign of wealth and prosperity. It has its worth in the hearts of mankind since pre-historic times. Long ago people had realized that trading in Gold will offer them handsome profits.
However, currently, with the local Gold Prices touching around 16,000 Rupees per 10 grams, India's gold investors are not willing to make further purchases. They show more inclination towards branded jewellery showrooms and some of them might just trade directly with nearby retailers. However, there are some investors who are still under the pursuit of exchanging old jewellery with new.
Experts call India as the hub of Gold dealing. There are many occasions and celebrations in India because of which there is a colossal amount of trading of Gold. During the period of festivals, Gold starts to show huge augmentation in its prices. There is one occasion recognized as "Akshaya - Trityaa" which is specifically reserved for purchase of expensive metals like Gold. Apart from it, there is also a festival of "Diwali" when people usually buy gold.
The year 2009 was specifically interesting for India in terms of Gold dealing. One will be alarmed to know that the International Gold Council declared initial 3-4 months of 2009 to be the worst in 20 years history. Why was that so? What were the factors that led to such a rapid decrease in Gold business in first 3-4 months of 2009? Let us have an insight.
Experts say that due to the devaluation of Rupee, there was an increase in the cost of Gold so and so that the prices jumped to Rs.15, 800/ 10 gm. Another reason was that the Country itself was on a verge of economic crises. A silent rise in inflation graph was being noticed, which kept on increasing.
Even during the month of February and March, the gold demand plunged to zero level. The unusual decrease in the consumption of gold was due to the high prices of gold in the international market. In the month of February, Mumbai market witnessed the highest gold price of Rs 15,780 per 10 gm. It happened due to the decrease in the value of rupee against the dollar. Moreover, the downturn or slowdown in the domestic economy also contributed towards the decline.
During the last quarter of this year, business of Gold started to regain. The primary reason behind it was thought to be the upcoming festival of "Diwali" which is considered to be a chief shopping festival. Henceforth, the price of Gold started to show a decline. Appreciating this drop off in prices, investors regained the lost confidence in market and started to re-invest in buying and selling Gold.
Moreover, property, stocks, mutual funds, government securities and bonds quite rarely offer attractive returns to their consumers since global recession has been on its peak but investments in gold and silver, all seem to be amplifying and reaching approximately Rs. 17,000 per 10 grams.
It sets an example for investors that Gold's prices can rise and fall but they should maintain their calm and look for a long term horizon; the results would definitely be dramatically positive.
