Gold Demand: Dropping Amid New Tax Burden?
While we wait for the next round of official reports on Indian marriage season gold demand, we can digest some anecdotal info. “In some regions, demand was nearly 30 percent lower than normal, but in others, it was on par compared to last year. Overall for the country, demand was down around 15 percent,” said Nitin Khandelwal, chairman of All Indian Gems & Jewelry Trade Federation. Well, he should know what he’s talking about – that’s a real retail support organization, affiliated with retailers across India.
Reasons for the decrease in gold demand include things like buying in Dubai rather than Mumbai to avoid the new Indian GST taxes, and the new tax structure driving up prices enough to matter. Seems most reasoning includes taxes. Some point to actually-higher gold prices this year. Let’s see, this year gold is hovering between 1265 and 1300 (USD), and last year gold was at … 1265. Hmmm, that sounds the same. Maybe it is the new tax rules after all.
That’s probably enough on that until the next round of official reports comes out. Today’s featured article from the Mises Institute is a brief and seemingly-sane look at possible effects of cryptocurrencies such as Bitcoin and the new Chinese gold-backed oil contracts. That might shake things up a bit.