India is the world’s largest gold consumer. But due to the country’s massive gold-related current account deficit, the government has been trying to curb gold imports. And with rising gold prices and weakness in the Indian rupee there’s very real concern that Indian consumers are going to wind down their gold purchases.
To get a better sense of how gold prices may be impacted, Morgan Stanley analysts Sheela Rathi and Ridham Desai show just when and why Indians buy gold. In 2012, gold demand for life events is expected to increase 50 per cent pushed by an increase demand in rural India:
Photo: AlphaWise, Morgan Stanley Research
Photo: AlphaWise / Morgan Stanley Research