1x2 prediction by Mightytips

This Key Gold Market Hits a 6-Year Low

It’s often said the global gold market is too complex to monitor or predict accurately. But recently, the trading action seems to be pivoting on a few key spots on Earth.

One of those is India. Where recent data shows how big changes are having a serious effect on gold prices.

Official numbers released earlier this month show that India’s gold imports are continuing to slide. With shipments into the country during April coming in at just 4.57 tonnes. A drop of over 80% from the 27.5 tonnes the nation imported during the same month of 2013.

Analysts blamed the usual suspects for steep decline. Namely, restrictive import policies introduced by the Indian government around precious metals. As well as a weakened rupee, which is making international commodities purchases more expensive for local buyers.

The April buying mark is a significant one. Being the lowest level for Indian gold purchases during this month for the last six years.

That explains a lot about what’s happening with global gold prices. Which have been largely flat for the last two months.

With India retreating from the market, gold has lost one of its key supporters. India is the number two gold buyer on the planet–and a key driver of prices.

Normally, we’d be expecting to see an upswing in prices around this time. Driven by rising Indian purchases for holidays in early May.

But the most recent figures suggest that didn’t happen. Likely a big part of the reason why bullion has been directionless in its trading.

As I’ve discussed the last few weeks, it does appear that pressure is mounting for the Indian government to change its gold import policies. But the numbers confirm that nothing is happening yet on that front.

We’ll keep watching this space to see if and when things pick up. Until then, expect gold to be relatively subdued.

Here’s to April being the cruellest month,

Dave Forest

[email protected]@piercepoints / Facebook

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