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Due to the decrease in Gold price Interest in the precious metal in Asia has increased sharply in recent months, writes Bloomberg. India has been importing more and more gold in recent months, while the Chinese gold market is also recovering. Consumers are daring to buy jewellery and investment gold again, now that prices are lower and the economic outlook is improving. This puts a solid floor under the gold price, which has recently been the Lowest level achieved in almost a year.
The increased demand for gold in India is not only the result of an attractive gold price, but also of a recent reduction of the import levy. In February, the Indian government reduced this levy to 10%, making it cheaper to import gold. This is also reflected in the statistics, as Switzerland has been exporting more and more precious metals to India in recent months. In fact, the country was the largest market in February with more than 56 tonnes of gold. This is despite the fact that Switzerland, an important hub in the international gold market, exported mainly to the United States and the United Kingdom last year.
Indian gold market picks up again, gold imports from Switzerland to highest level in two years
Indian jewellers saw a nearly doubling in demand for gold jewellery in the first quarter of this year compared to last year. People are buying more gold again in the run-up to the wedding season and benefit from the lower import duties. Last year Dropped Indian demand rose 35% to 446.4 tonnes, the lowest level in 25 years. This was mainly due to a drop of more than 40% in the demand for jewellery. Demand for investment gold in India also declined, but remained limited to just 11%.
In China's major cities, demand during the Chinese New Year was twice as high as it was a year ago, Zhang Yongtao of the China Gold Association told Bloomberg. Domestic demand is now outstripping supply, making the precious metal at a premium Traded compared to the international Gold price. This has not happened since February last year, when domestic demand largely fell off. Research firm Metals Focus expects China's gold market to grow by 21% this year compared to last year.
Due to the improved economic outlook and rising interest rates, the demand for gold in Western countries has fallen again. Nevertheless, it remains attractive to own gold, because the pick-up in demand in Asia is laying a solid foundation for the gold market. Also, the precious metal offers long-term protection against inflation and has a negative correlation with other investments. As a result, it is still attractive to buy gold as a form of gold in the long term. diversification in your investment portfolio.
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This contribution was made from Geotrendlines
