The Gold Story: Still A Stunner
4/4/2013 9:00 PM Thursday
Despite the government taking up a series of measures to curb the demand for gold, the trends are still not showing much of a reason for the metal to lose its charm for investors, says Amit Bhanot
It may have been the last piece of bad news in the last fiscal, but it hit the Indian economy below the belt. On the last trading day, the whole economy was jolted with the December quarter Current Account Deficit (CAD) number, which has risen to a new high of 6.7 per cent of the GDP, pathetic by any standards. In fact, what is more disturbing is that this figure stood at 5.4 per cent in the quarter ending September 2012. This is more so in an environment where the government is toiling hard to bring the financial health of the country under check by any means, be it fiscal or monetary.
This difficult situation has brought into glaring focus once again, the fascination of the Great Indian Public for the yellow metal, i.e. gold. In fact, this is now being presented by the Government as the primary cause for an unprecedented spurt in CAD (discounting the other major cause that we certainly can’t do away with – a heavy crude oil bill).
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