Gold prices to bottom out in 2015: Report
If the industry sources have to be believed upon, the gold prices that have been under decline since two years, are expected to witness further deep downfall in 2015. According to industry reports released on Friday, the physical demand for gold has gone down in the year 2014 and as a result China, the world’s biggest consumer of gold fell down to the second position, giving a way for India to become the leading consumer of yellow metal in 2014. The report, however, suggested that the Chinese gold demand will increase in 2015, but, it may not be able to reach a target of $1000 tonnes, which it achieved for the first time in 2013, the report added. Whereas, based on the earlier reports, India’s total gold imports in FY2014-15 are expected to increase by around 20-25% from last year’s 661.7 tonnes, as imports during April – December 2014 are already at around 665 tonnes. The Government of India, earlier in January 2015, had ruled out restrictions on gold imports, owing to the decline of imports in December, 2014. Meanwhile, the Government of India’s move to withdraw some of the restrictions placed on the import of gold is expected to provide a fillip to the jewelry industry which has been recording lower than expected volumes in the last few months, as per a report by research firm ICRA. In this regard, the All India Gems and Jewellery Trade Federation (GJF), in its recommendations to the Union Budget 2015-16 had also asked the government to reduce the import duty on gold from 10% to around 2%, considering the expected decline of crude oil prices in 2015. The GJF has also urged the government to develop a comprehensive gold policy to make India a global jewellery hub as a part of Prime Minister Narendra Modi’s ‘Make in India’ initiative. GJF has also urged the government to provide incentives in the jewellery manufacturing sector and reintroduce metal gold loans (MGL) with lower interest rates to promote manufacturing in the sector in India. According to the latest Gold Fields Mineral Services Ltd report, the gold prices are likely to average at $ 1,170 per Oz during the entire year 2015. This should mark the low point for gold and signal a bear-market reversal.
This article was published on January 31, 2015.
to success.