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Gold/Mining/Energy : Precious and Base Metal Investing

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To: russwinter who wrote (31693)	10/24/2004 9:40:06 PM
From: Chaka	Read Replies (1) of 39344

Even with gold holding firm in the last few months, the strength of Indian gold demand continues to surprise most analysts. In the past 5 months, most of the increases in the price of gold has been offset by the increase in the rupee, from under 43.5 in April to roughly 46.0 at present. This is a major contributing factor to continuing demand and total imports of gold into that nation could total 880 tons this year, up some 10% over last year. As the economy of India continues to thrive, it is likely that the currency will follow, and thus also likely that gold imports will continue to rise. Please remember that gold buyers worldwide think in terms of their own currency, and not in terms of gold in Dollars. A higher rupee makes it cheaper for Indians. As an aside, Indian households hold about 15,000 tons of gold, over 10% of total world above ground supply. The basic premise in this paragraph is patently wrong - the rupee depreciated from 43.5 rupees to 1 dollar in April to 46 rupees to 1 dollar! -CK

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