WGC Spotlights Gold's Huge Potential to Become a Strong Financial Asset

SEATTLE (Scrap Monster): The proposed announcement of comprehensive gold policy by the Central Government is likely to transform gold into a strong financial asset in India, said the World Gold Council (WGC).

According to PR Somasundaram, Managing Director-India, WGC, the proposed new gold policy will usher in a new era of developments in the country’s gold industry. It will allow banks to do bullion banking, which will help customers do bullion-related transactions with banks. Further, it will lead to creation of spot gold exchanges, which in turn will benefit consumers and small jewelers in particular, by promoting liquidity in the market.

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The WGC believes that the gold policy is likely to improve overall sentiments within the gold industry. The draft of the policy has already been circulated to various ministries for their comments. The proposal to set up a spot gold exchange is also under serious consideration by the government. Announcements on both are expected any time, WGC noted. The announcement on gold policy and spot exchange will have its impact on international gold markets, since the country accounts for almost one-fourth of the total global gold demand, it added.

Meantime, the Council has revised upwards the country’s gold consumption forecast for the year. As per new forecast, the demand is expected to total around 750-850 tonnes in 2019, as compared to earlier projection of 700-800 tonnes. The forecast is on the higher side when matched with the average gold demand of 760.4 tonnes in the whole year 2018. It must be noted that the country’s central bank gold purchases had hit the highest level in 50 years during the previous year.

This story first appeared in www.thehindubusinessline.com