Pages

RSBL Gold Silver Bars/Coins

Wednesday 22 August 2012

WE NEED A GOOD MONSOON....SOON!!!!







Every year, the entire country - be it the big time investors or the small hard working farmers- all await for the most important months of the year- The June- September Monsoons.
Though India has been in the limelight for its technological, infrastructural and outsourcing developments, about two-thirds of the country's one billion people depend on farming for a livelihood and agriculture accounts for about one-quarter of the gross domestic product.
A good monsoon strengthens the rural consumption power which in turn creates an impact on growth. This clearly indicates that growth of the Indian Economy is largely dependent on agriculture, a good harvest and more importantly a good monsoon.
This entire cycle affects not only then rural areas but also the urban economy. Equities, real estate, precious metals, commodities etc all are somewhere or the other, directly or indirectly affected by monsoons.
India can hardly afford a dreadful monsoon as it has already been facing a setback due to global slowdown, domestic inflation and an uncertain economy.
Though monsoons have recovered in the past 10 days, India is still under the shadow of a drought. The entire economy now depends on what will happen by August end.
Talking about precious metals, gold has not shown as much movement as it had in 2011. A year ago gold was heading toward $2000 an ounce but has dropped back to the $1500 range and has been lying there since quite some time. However in the Indian markets, gold is much costlier than what it was last year- thanks to the appreciation of the rupee.

Another factor that has played an important role in gold prices in India is the monsoon. India- which the largest consumer of gold in the world has been facing a very weak downpour. India’s rainfall total this year is about 20 percent below its 50-year average, and possible drought will adversely affect gold consumption as the focus would turn to food and survival

So far, in June, rain deficit has already reached 41%. Rural India still accounts for 60% to 70% of gold sales in the country and if the monsoon is below normal this year, gold purchases will struggle to cross the 600 tonne mark this year.
India's demand for gold has reportedly fallen far more drastically than that of the world. In the first quarter of 2012, domestic demand for the yellow metal witnessed a 30% crash year on year. Imports too have crashed. India's gold and silver imports have fallen 52% in May. April too witnessed a decline, with gold and silver down by 33% to $3.1 billion. Imports of the yellow metal had already shrunk in the January to March 2012 period.  
Though India's annual monsoon rains had covered almost half of the country at the start of June, there has been a palpable slowdown, with no signs of a pick-up and a forecast of bright, sunny days. 

Where the entire country eagerly waits for a heavy downpour, analysts are pessimist about a good monsoon and predict a dark cloud that will bear no rainfall

No comments:

Post a Comment