One of the vitally important markets in gold is the Indian gold market. Gold has a long and storied history in India, being a fundamental part of Indian religious life from temple offerings to wedding gifts. Many Indian families hold a significant part of their wealth in the form of gold, mostly in jewelry. Some Indian temples that have received donations of gold for centuries are estimated to be sitting on billions of dollars worth of gold. In fact, gold is so important to India that the country’s gold market is responsible for an estimated 50 percent of current world gold demand.
That means that any news coming out of India with relation to gold will have an effect on the world gold market. And the news right now is good, at least for those who have already invested in gold.
Gold demand from India jumped 49% in May on a year-on-year basis, with imports rising to 116 tonnes. Overall gold demand for the year is expected to run around 750-850 tonnes, although higher prices could put a damper on that. Lower prices that prevailed in May helped to spur demand in India, but gold’s recent price rise could lead to a reduction in demand in the coming months.
Gold has had difficulty breaking out this year, even though gold demand is strong throughout the world and particularly from central banks. Gold has consistently struggled to break through the $1,350 per ounce barrier but is testing that barrier once again. If it breaks through soon, don’t be surprised to see it hit $1,400 or even $1,450 in the near future, thus fulfilling most analysts’ expectations for this year’s target price.
For ordinary investors, there’s still time to buy gold while it’s still relatively reasonable in price. When gold was under $1,300, worsening economic conditions made buying gold a no-brainer. Everyone knew that gold would increase in price once the economy began to slow down, and now we’re seeing those rises coming to fruition. Don’t sit on the sidelines wishing you had bought gold while it was still cheap. Safeguard your assets with gold today.
This article was originally posted on Goldco.
