Shifting Sentiments for the Gold Market

Shifting Sentiments for the Gold Market

The ever fluctuating price of gold bullion reached $7 per ounce this week, bringing positivity to the market after it had reached an eight month low. However, there is still progress to bring this figure back up. The cost of silver has not been so encouraging and actually reached its lowest price since June of last year. At just $18.66 per ounce for silver, this is a much lower price than would usually be expected of the market. It should also be noted that the stability of the dollar has been weakened by an increased number of unemployment claims.

It has been a common tradition in years past that September is a good month for the value of gold, however, this year seems to be an exception. Although the value is beginning to rise after the slump, it is still not at a preferable figure for investors. As well as being attributable to a decrease in the stability of certain currencies, it is also thought that this is due to less demand than usual. Experts are now predicting that this low price for gold bullion may continue, making this a great time to buy.

The decline in demand is certainly true in India which has historically been known for its love of gold. Indians are known to be one of the biggest lovers of the yellow metal but many say they are discouraged due to falling prices around the world. The price of gold in India has been falling steadily over the past month at the same time as foreign currencies become weaker and the rupee grows ever stronger. However, despite a growing lack of faith in the future of gold as an investment commodity, Indians will still continue to buy it for ceremonial and traditional reasons such as for giving as a gift or for decorating temples. As the second most popular item to be imported into India, second only to oil, it is certain that no big changes will be taking place soon. However, it is becoming apparent that attitudes to gold in India are changing.

The World Gold Council has reported that investment demand for this precious metal fell a massive 67% during the June quarter of 2014. 37% of all gold sales during 2013 happened in India, demonstrating the continuing impressive demand for gold in the country. However, given the trend of the last decade for the cost of gold to keep going up, it is unclear for how long this decline will remain.

+ There are no comments

Add yours