Indian demand for gold could fall by 25%-30% in 2012

Indian investors are dumping Gold and moving their money into sovereign bonds, latest data from the Association of Mutual Funds in India (AMFI) shows.

Funds that invest in bullion saw a 4.3% decline in its assets to 91.5 billion Rupees in December while those who invest in bonds saw a 17% rise in its assets to 31.2 billion Rupees. Indian gold prices have been weak in December with prices slipping from around Rs 29250/10 gm to near Rs 27500/10 gm by late December. And as such, the fund outflows from Gold assets should not come as a surprise.

With inflation showing signs of easing, gold funds could see more outflows. The Bombay Bullion Association had earlier stated that they expect 2011 gold import figures to total 878 tonnes, an over 8% slump from 958 tonnes import in 2010.

Going into 2012, the Association believes that Indian demand for gold could fall by 25%-30% in 2012 unless prices move  - CommodityOnline

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Posted by admin on Jan 13 2012. Filed under Gold predictions. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry