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Landslide Election In India Bullish For Gold
Posted May 16th, 2014
TANGIBLE INVESTMENTS - Los Angeles - by James O'Dell - Gold and silver prices firmed on Friday with gold trading at $1,292.10 an ounce and silver trading at $19.31 an ounce after a raft of better than expected economic data added pressure to both gold and silver. It appears that gold will still endb the week with a modest gain after interest in gold backed ETFs (paper gold) picked up somewhat, producing its first inflow in a month.
A report was released on Thursday that hedge fund Paulson & Co, retained its stake in one of the largest ETFs in the first quarter of 2014 while many others bailed, and has benefited as bullion prices rebounded from their biggest annual loss in 32 years. European Central Bank (ECB) officials are said to be moving forward on enacting additional economic stimulus after ECB president Mario Draghi stirred investor’s hopes last week, for further accommodation to come in June.
"The Governing Council is comfortable with acting next time but before we want to see the staff projections that will come out in early June," said Draghi following the ECBs announcement that it would be keeping rates unchanged at 0.25 percent.
In India, election results are in, and Narendra Modi and his Bharatiya Janata Party, who were being touted as pro-gold, have won a landslide victory. Analysts expect the draconian restrictions now being placed on the importation of gold into India, to ease with the newly installed government. The previous party, known as the Congress party, has ruled India for much of its post-Independence history.
The BJP appears to have picked up 280 seats in the lower parliament to become the first party to gain an absolute majority since 1984. Prior to the imposition of the 10 percent import tariff on the yellow metal, India had been, historically, the world’s top gold consumer before relinquishing their position to China in 2013.
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