By: Mike Hammer
Some days there’s barely any worthwhile news. Other days, there’s a flood of it. Today we see reports that gold demand is slightly down in India, due to jewelers waiting for a possible tax reduction. If true, this would turn out to be a delayed demand, and so we’d expect to see a corresponding pop in sales when the tax rate changes – otherwise, after the vote if the rate isn’t lowered.
Interestingly, there are still reports of gold smuggling and off-the-books sales to avoid the country’s gold tax. The chairman of Malabar Gold & Diamonds, a huge jewelry retailer, says the tax reduction would be “a huge gift”.
China, meanwhile, forges ahead with increasing demand. The increase is due to growing demand for gold jewelry in smaller cities, indicating wealth is spreading through the country’s middle class. And with a population over 4 times the size of the United States, that’s a lot of people coming in to the gold market.
If that trend increases, we can expect demand for gold to remain strong for some time to come. You can read more about gold demand and supply in today’s featured article – we have to leave something for those of you who like to read! In this case, it’s gold supply info.