The higher price of gold does not serve as a deterrent to wealthy Indian consumers, Bloomberg reports.
Economic growth in India's upper class is fueling a demand that is gaining momentum, the World Gold Council notes, also stating the price of gold might strike $1,500 per troy ounce this year.
"Basic disposable incomes are increasing because of which there is good demand and people are smartly investing in gold," Rajesh Mehta, chairman of Rajesh Imports, told Bloomberg.
In 2009, India imported 557 metric tons of gold. In 2010 the nation imported approximately 800 tons, according to the council. India has long been the biggest importer of gold in the world.
Gold bullion for immediate-delivery was worth $1,367.43 per troy ounce just after 3:30 p.m. on Friday in Mumbai and $1,378.20 per troy ounce after 4 p.m. in Seoul. Gold bullion's price shot up 30 percent in 2010 and notched its highest value ever of $1,431.25 per troy ounce on December 7.
"In spite of higher prices we are seeing good demand for jewelry in India," Mehta said. "The trust in gold is enforcing itself."
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.