After months on the threshold of the minimum, the gold market continues to suffer. Nevertheless, the haven asset par excellence has managed to maintain altitude despite the sharp weakening caused by the recent appreciation of the dollar.
The Asian market has been an absolute life saver in this case, especially since last week India’s expansionary monetary policy led to a surge in cash, and their citizens started to seek a more convenient way to convert cash into a tangible asset that can function as a real investment. It’s easy to predict that a cap on gold imports will be imposed in the country soon, as the government has already long been considering this possibility.
Obviously, this move has also contributed to an increased demand for Indian gold: many investors and ordinary citizens try to maintain sufficient reserves of gold in order to use it opportunely. Appreciation of the dollar and high demand from India are two strong currents flowing in opposite directions, but they are keeping the most noble of the metals afloat above the 1200 level.
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