Gold price record highs causing pain in India
Gold prices are up for a fifth consecutive day, something that is personally felt in India where people buy a lot of gold for weddings and other big social events, as the Indian rupee drops to record lows against the US dollar.
As a consequence, India's gold imports are set to plunge by more than 90% in March from February, marking the lowest level since the covid-19 pandemic. India is the world's second biggest consumer of gold. Gold demand usually stays strong in March as jewellers stock up for the incoming wedding season.
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India's struggles as gold prices rise
Gold prices have been steadily increasing for the past five days, which is quite fascinating. Currently, gold is being traded at 2,193, and it is interesting to know that many countries buy gold as a protective measure. However, each country has the power to decide whether or not to purchase gold. On the other hand, citizens of India are facing some significant problems because the Indian rupee has been losing value against the US dollar. In fact, the Indian rupee recently reached its lowest point ever, making it extremely tough for people in India to afford gold.
Because of the weakened Indian rupee, experts predict that India's gold imports in March will decrease by more than 90% compared to the previous month. This expected drop would be the lowest level of gold imports since the covid-19 pandemic began. Indian weddings typically drive high demand for gold in March, but the weakened rupee has made matters worse, causing a lot of hardship for individuals and also impacting India's gold market.
China's gold struggles as the yuan weakens
China, another important player in the global gold market, is also encountering difficulties due to the weakening Chinese yuan against the US dollar (USD/CNH). The declining yuan has made it challenging for Chinese authorities to sustain their gold purchases at current levels. The strong US dollar against the yuan has pushed China closer to recent highs, further complicating the purchase of gold for the Chinese market.
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