India probably can become the largest gold consumer in 2012. Considering the tradition behind the many centuries when Indian people invested in the precious metal it is very possible that the title will be given to India. However, there is another candidate, China that has recently adopted a new policy in which it encourages people to purchase the precious metal in large quantities.
The Indian population is very poor compared with many other countries. In spite of that, most households have at least a few pieces of gold jewels. When it comes to the wealthy families they invest massively in the precious metal for both tradition reasons and profitable investments.
In the fight between India and China for the supremacy of gold purchasing both countries stand a chance. Even so, there are some experts who think that China might be the winner this year even if the year has just started. One of the most solid arguments to support their point of view is the fact that the Indian government doubled the import duty.
Every time the taxes or import duties go up the purchase power goes down. This cycle is natural and is true in the case of gold purchase too. Because of the government decision specialists estimate that the purchase is going to decrease with at least 30% this year when compared with the previous one. 2011 was a very profitable year for gold investors in general including the Indian ones.
Increasing the duties is considered to be a huge mistake on the side of the government. Not only will the people stop importing this precious metal, but the import duties might be fewer than in the past. If the Indian government took a very bad decision, the Chinese one acted very wisely. It encouraged the population to buy the precious metal and invest the very little they had in it.
Importers, both small and large say that they might be affected by the decision of the government too. However, they are more optimistic and consider that losses might not be that big especially since not all buyers look at the import duties.
Investors know that there is no such thing as completely safe commodity. However, gold is the next best thing so in spite of the increased taxes the Indian investors might continue to import the precious metal and make India the world's largest gold consumer in 2012.
The Indian population is very poor compared with many other countries. In spite of that, most households have at least a few pieces of gold jewels. When it comes to the wealthy families they invest massively in the precious metal for both tradition reasons and profitable investments.
In the fight between India and China for the supremacy of gold purchasing both countries stand a chance. Even so, there are some experts who think that China might be the winner this year even if the year has just started. One of the most solid arguments to support their point of view is the fact that the Indian government doubled the import duty.
Every time the taxes or import duties go up the purchase power goes down. This cycle is natural and is true in the case of gold purchase too. Because of the government decision specialists estimate that the purchase is going to decrease with at least 30% this year when compared with the previous one. 2011 was a very profitable year for gold investors in general including the Indian ones.
Increasing the duties is considered to be a huge mistake on the side of the government. Not only will the people stop importing this precious metal, but the import duties might be fewer than in the past. If the Indian government took a very bad decision, the Chinese one acted very wisely. It encouraged the population to buy the precious metal and invest the very little they had in it.
Importers, both small and large say that they might be affected by the decision of the government too. However, they are more optimistic and consider that losses might not be that big especially since not all buyers look at the import duties.
Investors know that there is no such thing as completely safe commodity. However, gold is the next best thing so in spite of the increased taxes the Indian investors might continue to import the precious metal and make India the world's largest gold consumer in 2012.
About the Author:
With the Hinde's gold funds you get exposure to the upside appreciation in the precious metals sector while smoothing out the downside volatility.
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