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Wednesday, 17th March 2004 (4555 views)

Indian farmers are expected to invest their money in gold over the next couple of months, following a successful harvest.<BR/><BR/>Despite recent volatility in gold prices, including a 15-year peak of $430.50 an ounce on January 6th, buying is expected to be good over the next two months after prices started to ease and farmers reported bumper crops.<BR/><BR/>Demand in India, the world's largest consumer, had fallen over the past few months, but is already reported to be picking up at a price level of around $400 per ounce. Gold demand is also expected to increase ahead of federal elections in April and May.<BR/><BR/>Girish Kumar Choksi, a bullion dealer in Ahmedabad Choksi told the Business Standard that rural demand for jewellery was likely to be strong with farmers harvesting good oilseed, cotton and grains crops, after excellent weather. Nearly two-thirds of India's billion plus population depend on agriculture for a livelihood. <BR/><BR/>Indian consumers purchase yellow gold as both an investment and adornment. Domestic prices follow global trends due to dependence on imports, with India buying an average 1.6 tonnes of gold a day. <BR/><BR/>Traders estimate that India will import about 60 to 70 tonnes of gold a month until May, compared with around 55 tonnes a month a year ago.

 

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