GJ Town India

Dollar weakness and ETF flows fuel gold   Recently, World Gold Council released their Gold Market Commentary for the month of February 2025. The Commentary reviewed the February; Gold hit new highs during the month, supported by a weaker US dollar, extending its y-t-d gains to 9%.   Gold continued its uptrend in February, hitting multiple new highs before pulling back to end the month at US$2,835/oz – up 0.8% m/m.1 This performance was echoed across major currencies, all of which also registered new record highs. General interest in gold was bolstered by continued flows of gold into COMEX inventories, driven by continued tariff uncertainty.   According to our Gold Return Attribution Model (GRAM), US dollar weakness during the month was one of the primary drivers of gold’s performance, alongside an increase in geopolitical risk and a drop in interest rates. And while gold’s strong price appreciation in January created a small drag, it was counterbalanced by positive suppo...

Financing remains a crucial challenge for the industry!   Recently, David Tait, Global CEO, WGC , Sachin Jain, Regional CEO India, WGC Meets Rabi Shankar, Deputy Governor RBI and Rohit Jain, Executive Director RBI along with Andrew Naylor, Head of Middle East and Public Policy, WGC and Rakhi Khanna Global, Head of Corporate Communications, WGC at the RBI Headquarters Mumbai. On the other hand, news focuses on the Financing remains a crucial challenge for the industry! Recently, the WGC published in their India’s Gold Market: Reform and growth, report!  According to the one of the biggest challenges for the Indian gem and jewellery industry has been securing bank credit – a challenge that has increased in the wake of the Nirav Modi, Mehul Choksi scam when the Indian banking system was defrauded of around Rs130bn (US$2bn).    Compounding this, more than 20% of loans given to the sector have become non-performing assets (NPAs), resulting in the gem and jewellery indus...

  Rural economy drives gold market evolution   India’s Gold Market Reform and growth encouragingly, the rural economy itself is changing. In 1993, rural areas contributed less than 30% to manufacturing output. By 2011, the time of the last census, that percentage had increased to 51.3%. A continuation of this trend could deliver meaningful change, particularly in conjunction with recent government policies.   Online marketplaces and improving infrastructure are changing consumer aspirations and logistical capabilities. This could dilute the sharp division in consuming and investing habits between rural and urban consumers in the coming years. Taken together, they could engender a period of sustained recovery for the rural economy, driving GDP growth and consumer spending across India.   There could also be considerable consequences for India’s gold industry, as rural households still account for a majority of India’s gold demand. Sustained growth in rural incom...

  Report on Global gold-backed ETFs published A popular gateway to the gold market!   The World Gold Council (WGC) published, Global gold-backed ETFs: A popular gateway to the gold market, report & said, “Recently, gold has become globally accepted as a strategic asset amidst a high-risk and low-rate environment spurring investment demand and the expansion of the gold-ETF market.” The increased quantity, size and location of gold ETFs have provided easier and more efficient access for investors allowing them to utilise many general advantages of ETFs.  While there are numerous ways for investors to own gold, such as bars, coins, derivatives, over-the-counter (OTC) instruments and gold stocks, many have embraced gold ETFs for qualities such as cost efficiency, transparency, and liquidity.   The growth and evolution of gold ETFs have already helped advance the broader gold market and are likely to continue to do so, providing additional support for the role of ...

Gold not require term funding! Recently Dr. Keith Weiner, CEO- Monetary Metals and the president of the Gold Standard Institute USA inks, Will Basel III Send Gold to the Moon! He said, “A number of commentators have predicted that the rules of the Basel III bank regulations will cause gold to skyrocket (no, this article is not about our view that gold does not go up, that it’s the dollar going down, that the lighthouse does not go up, it’s the sinking ship going down in the storm).” Will it? It would be easy to say as with all of their other predictions of gold to infinity and beyond, “wait and see.” But where’s the fun in that? We’d rather look into the nature of the claim, how banks operate, and what the regulation actually says so who wants to understand a bank balance sheet, and regulators’ view of bank risk? In other words, who wants to understand whether gold will skyrocket? If you picture the bank getting pinched by twin pincers, that’s right. One is that fund...

Now it is clear that the gold policy India is at latch. It is now shaping up at NITI Aayog even during the election! Recognizing the criticality and untapped potential of the gold market for providing a stimulus to exports, economic growth and employment, a Committee on Transforming India’s Gold Market was constituted by NITI Aayog under my Chairmanship, Ratan P. Watal, Principal Adviser, NITI Aayog and Member Secretary, EAC – PM. Initially themes were set well, 1: Current Industry Profile, 2: Market Segmentation & Estimating Trends for Gold Market in 2022 including Bullion Exchange, 3: Trade and Investment Issues-Incentive Structure & Ease of Doing Business, Regulatory Framework for Gold, 4: 5: Tax Issues, Gold in the Financial System and Digital Payments, 6: Bridging Skill Development and Employment Generation & Technology Up gradation. Various experts also enriched the sub group deliberations. The challenges were emerging from a regulatory framework, p...