The world's largest gold-importing country is India, which has been finding prices too high lately. Thus suggests that the recent new high in gold is best treated as a double top, with early December's price peak the first top. From Jewellers in India look to home as global markets struggle:
VICENZA, Italy (Reuters) - Jewellers in India are pinning hopes for demand in 2010 on the domestic market as international destinations struggle, but extraordinary price volatility is limiting sales, even in auspicious periods.
India, the world's biggest market for the precious metal, had made successful forays into target markets for mid-priced jewellery, but wholesalers exhibiting at Vicenza's international jewellery trade show said uncertainty across financial markets was also mirrored in export activity.
"For the moment, all the markets are slowing down, except for India. Europe is slowing down, the U.S. is not out of the woods yet," said Pradeep Kumar Godha, chairman and managing director of Shantivijay Jewels ltd, in Mumbai. . .
Hemant Shah, director of Hammer Group, a major jewellery wholesaler and core Council member of India's state-backed Gem and Jewellery Export Promotion Council, said that the uncertainty had turned attention back to Asia. . .
He said clients were reporting a disappointing outcome from Askhay Tritiya, a religious occasion where demand usually jumps because it is considered an auspicious time to buy jewellery and coins.
"Although it is deeply entrenched in religion, this year demand fell by about 60 percent, according to clients I speak with," he said.
Gold is suddenly looking challenged. Not many knowledgeable traders are going to want to fight India; and with China's stock market in a bear and property perhaps already moving down there, demand for jewelry will not soar there either. And if yesterday's post on ECRI's apparent change of view is correct and if ECRI is correct, there is lots of slowdown in growth or outright recession coming.
Sometimes cash has its uses.
Copyright (C) Long Lake LLC 2010