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Newmont president sees gold in ''paradigm shift''
By Prasenjit Bhattacharya
Dow Jones Newswires
http://sg.biz.yahoo.com/040705/15/3lhrc.html
NEW DELHI, July 5 -- Strong growth in India's farm
incomes after a second straight year of good
monsoon rains will boost demand for gold in 2004,
leading to higher imports this year, a senior industry
official has said.
"Rural demand in the first six months has been very
strong and is expected to remain high over the year.
Besides, a number of people who invested in the stock
markets ploughed back their capital gains into gold in
the first quarter of 2004, which further boosted demand
for gold," said Sanjeev Aggarwal, managing director of
World Gold Council, India.
India is the world's largest consumer and importer of
gold, with 80 percent of the total demand coming from
jewelry makers.
The country's gold consumption has been steadily
rising since late last year following a rise in disposable
income for members India's large middle class who
depend heavily on agriculture for their livelihood. The
country's agriculture sector saw a bumper harvest last
year and is expecting a similar crop this year.
India's farm output rose 10 percent on year in the
financial year ended March 31, 2004. Gold demand
rose 16 percent on year in 2003 to 588 metric tons,
while the value of total gold imports was 320 billion
rupees ($1=INR45.90).
Aggarwal said gold demand could reach 600 tons in
2004 if prices aren't too volatile during the rest of the
year and if the economy continues to grow at a fast
rate.
He said imports could be higher as well in 2004, but
didn't give an estimate.
"If the monsoon rains are good, economic growth
will accelerate and that would definitely boost gold
demand. Besides, the WGC is also doing
promotional activities to keep consumer interest in
gold high," said Aggarwal.
Aggarwal said gold prices in India will hinge on the
strength of the dollar.
"The weakening of the dollar over the past several
months led to a rise in gold prices globally, and in
India. Recent trends suggest gold prices are
(stabilizing) and may remain range-bound over the
next two-three months," said Aggarwal.
He added that gold prices "may hover around current
levels," though he didn't give an exact price range in
which prices may fluctuate.
India's gold prices rose around 12 percent on year to
INR6,015 per 10 grams July 5, 2004, compared with
INR5,380/10 grams July 3, 2003.
Aggarwal said demand for gold jewelry had seen a
rise 2003 despite higher international prices and
increased competition from diamond, silver and
platinum in line with changes in fashion trends.
"Despite diamond and silver jewelry starting to make
a presence in the Indian market, gold remained an
overwhelming choice of most women."
He added, "Gold jewelry accounts for 80 percent of
the Indian market and grew at 16% on year in 2003.
Diamond, on the other hand, accounts for just 15
percent of the jewelry market and grew 22 percent
on year in 2003, on a much, much smaller base."
Speaking on the changing trends in gold jewelry,
Aggarwal said women professionals are increasingly
wearing lighter gold jewelry to work instead of
traditional heavy gold ornaments, which are being
reserved for social occasions such as weddings.
"What is important is that women have a vast array
of choices in gold jewelry now. There's lighter gold
jewelry, heavy ornaments, and jewelry items that
have either traditional or modern designs. Choice
increases interest in gold and gold sales," said
Aggarwal.
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http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html
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1-800-BUY-COIN
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