from The Daily Bell:
India prepares for shining return of gold demand … Festival season is kicking off in India – a period in which gold sales traditionally spike in the world’s largest consumer market for the precious metal. This year investors are watching the key market particularly closely, following a period of muted demand when bourses have rallied and supply has been choked. The recently elected government of Prime Minister Narendra Modi surprised industry analysts by keeping import controls unchanged in its July maiden budget, in spite of an improvement in India’s trade balance. – Financial Times
Dominant Social Theme: We would all be better off without this barbarous metal.
Free-Market Analysis: Last year, India’s government made it harder and more expensive to import gold and this article in the Financial Times trumpets the success the government has had in its war on gold. Because of India’s insatiable demand for gold, the country’s current account balance was ballooning. As imports continually outpaced exports, the world’s currency marts pounded down the price of the rupee. The idea then became that if gold imports could be curbed, the price of the rupee would rise again relative to other currencies. Hurray!
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