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Improving Gold Demand from India Should Help Market Fundamentals
Improving Gold Demand From India Should Help Market Fundamentals – HSBC
By Neils Christensen of Kitco News; [email protected]
www.kitco.com
An improving Indian economy could improve gold’s fundamental picture and help prices find a bottom, say analysts from HSBC. Last week, India’s trade deficit hit a 17-month low as a result of weaker oil prices. Looking ahead, economists at the international bank say they expect to see a current account surplus sometime this year. “While the Indian government did not announce a relaxation to the tariff on gold imports in the Union Budget on 28 February, a current account surplus would be viewed favorably for the bullion market and local merchants as it raises expectations that the RBI may eventually ease the tariffs,”analysts say. “If the INR stabilizes, and given low international gold prices, we expect bullion imports may remain strong in the coming months. Should this dovetail with continued import demand from China, the market could be on a firmer fundamental footing and gold prices may begin to bottom out.”
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