India Bullion Market

Zimbabwe, from its part, has now started inviting countries to invest in their gold mines. Recently, the government appealed to Chinese firms to invest in Zimbabwean mines, asking companies to ignore the country’s recent troubles.

According to Met, monsoon is late and is expected to be below average for the first time in four years. This is potentially significant as the strength of the monsoon is obviously vital to the quality of the harvest and this in turn dictates the amount of funds that the farming community (which constitutes more than half the Indian population) gets when the harvest is in. Gold has traditionally been one of the primary purchases for the Indian agrarian population (although it is now having to compete to some extent with white goods, electronics and holidays), who typically account for between 60% and 70% of Indian gold purchases. A poor harvest will undermine gold buying and crop failures have already been reported.

Addressing a conference, Feng said the price of the precious metal may rise as the global recession and political instability in some parts of the world sustain its appeal as a haven investment.