Mumbai Price of gold plunged to below $800 per ounce level for the first time in 8 months. These falling prices are luring buyers.
India, the world's biggest buyer of bullion, may increase its gold imports for the first time in nearly 12 months.
The first half of 2008 saw high and volatile gold prices driving down demand.
But in the last few weeks prices have plunged and India is seeing a sudden rush of imports.
In July, India imported about 30 tonnes, that's 25% more than the 24 tonnes bought in June.
The demand is so high that buyers are ready to pay a premium of 3-4 dollar per ounce.
Bullion Analyst , Bhargav Vaidya said, “We don't buy as per season, we buy as per price. This is one of the best examples. We are seeing an import of almost five tonnes a day, which would not be even 500 kg in normal conditions two years ago."
In fact, in these times of high inflation and volatile markets gold makes for a very smart investment.
Executive Director, Benchmark Asset Management Co, Sanjiv Shah said, “Gold is very useful in times of inflation. When you look at any currency, whether it is dollar or euro or anything else, the monetary policy of that instrument decides how inflationary expectations are going to be looked at. But in gold, people always think that the yellow metal beats inflation and people try to invest in gold.”
Investment in gold-Exchange Traded Funds or ETFs on NSE have hit a record high of 650 tonnes . Interestingly, the average daily volumes on the MCX have almost doubled to nearly Rs 8000 crores in the last 10-12 days.
Enough evidence that gold is glittering liken never before.
(With inputs from Manisha Gupta, Deepkshika Sharma and Isha Dalal)
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