As per World Gold Council, Total Gold demand for Q1 2013 stands at 963 Tonnes. Global Jewellery demand stands at 551 tonnes. India and China accounted for 62% of Q1 2013 global jewellery demand. In case an Indian government gets successful in curbing Gold import then it would have an adverse impact on overall global supply and demand scenario. The current Gold level pricing in India is sustainable at 26k to 27.5K per Oz due to Indian INR conversion against Dollar. The fall in orders from India is going to create low demand vs. high supply environment and in-turn may initiate another Gold price slide on global level.
The Indian Government move is going to be very productive for black marketer of Gold in India and it would definitely create secondary grey gold market. One should not blame Gold import cost the main reason for Current Account Deficit but should also think of inflicting positive investment environment so that Investor should be willing to Invest in India.
