Tuesday, August 12, 2008
Gold demand from India
This is question...does anyone have an idea of the factors affecting gold demand from India? I mean what affects the marginal increase or decrease in consumption? And what are the seasonal factors? The reason I ask is that is that with inflation running at almost 10%, when gold prices don't rise as much relatively, does that affect demand positively? On the other hand, if demand is coming from poorer sections of society, they may not have the money to buy the gold. So it's a complicated issue. Post your replies in the comments section if you have any thoughts. BTW, i think gold is a good buy for the 1 year timeframe. I like to play with leverage so I bought DGP, a double long gold ETN (exchange traded note) that's leveraged 2x to the POG (price of gold)
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Bought some DGP too... pls post when you dump it :)
There are many seasonal factors like Diwali, Marriage season and stuff, but I’m sure that's not what you are talking about.
There might be an overall changing trend in the consumer behavior as ppl have more disposable income but save less. Also the old mentality to buy gold as in investment might have changed, especially in the younger gen - they'd rather buy an iPod or a fancy cell phone rather than some un-cool gold.
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