Gold Prices Down 2.2% in India in H1-2014, While up 3.2% in the US
As the curtains were drawn on the first half of the calendar year 2014, a flashback to the Gold prices reveals a divergent trend between the prices in India and United States (US).
For the records, the MCX Gold futures (Indian Gold Prices) for 24 karat Gold have declined by 2.2 per cent (Rs 646) to Rs 27,776 in the first half of the year.
On the other hand, Gold prices in the US, or the NYMEX Gold futures, have registered a gain of 3.2 per cent at $ 1,240.90 per ounce.
Fundamentally Gold prices across the world tend to move in line with the benchmark prices in the US. However, the only factor that influences a divergent trade is the currency movement.
Hence, there is no surprise to the fact that Indian Gold prices have declined owing to a stronger Indian Rupee versus the US dollar.
The Indian Rupee has gained 4.6 per cent (Rs 2.89) in the last six months at 59.2775 versus the US dollar.
The other factor, which led to a fall in Indian Gold prices, was easing of Gold import norms by the Reserve Bank of India in the month of May.
Interestingly enough, Gold prices in India have fallen at a faster pace so far this year, when compared to the rising prices. Hence, despite recording just two monthly losses out of the first six months, the net result is still negative.
Gold prices were down by 5.2 per cent in March 2014, and down 7 per cent in May 2014.
What lies ahead in the next six months for Gold – would largely depend on the on-going geo-political situation, and back in India – the upcoming Union Budget may set new policy norms.
The markets are buzz with talks of likely duty reduction on Gold imports, with reports of some foreign brokerage houses indicated a likely crunch in stock with the Indian jewellers.
Either way, Gold prices seem to have a forgetful 2014 so far, with prices edging slightly lower so far. Will Gold prices regain the lost shine, or will they drift lower only time will tell.