Demand from Rural India raises Perth Mint December Gold Sales

The year ended on a stronger note for gold. The demand for gold surged thanks in part to the high crop prices that farmers in rural India are getting for their produce. It’s clear that gold has a great influence on the economy of a country. According to the Economic Times of India, the demand for gold rose in India as a result of farmers getting more for their crops. Clearly, it has been a good harvest judging by the 15% rise in gold purchases in December. The rising prices of crops like Soybeans, cotton and guar have boosted farming income.

Gold is regarded as a great way to store wealth, especially for people who live in rural areas. A large percentage of the country‚Äôs demand for gold comes from areas like these. This year’s demand for gold increased imports to 67%.

Perth Mint has reported an increase in the sale of gold bullion in December. According to the mint, the sale of gold bullion rose by 13% to reach 27,000 ounces over December, 2017. Australia ranks as the second largest producer after China. Perth Mint is an important supplier of gold in the world supplying gold to countries like India, Germany and even China itself.

The Mint refines 90% of Australia’s gold which is then sold and exported to other countries. India isn’t the only country that the mint has seen a rise in the demand for gold from. Germany is amongst other countries that are buying more gold from the Australian mint. Germany bought $487 million worth of bullion from the Australian mint. Gold trade has been affected by events such as Brexit.

Overall, gold sales for 2017 were dismally low. The major bullion suppliers like Perth Mint, the US mint and the Royal Canadian Mint suffered. Whilst it might have been a disappointing year for gold all round, December figures went up a little because of the economic growth that India has been experiencing.

The US demand has trailed behind that from the east. Analysts believe that most of the people who would typically buy gold in the US have become less reactionary after Donald Trump came into power. There is a false sense of security that a lot of US investors have fallen into. Instead of stocks going down they have surged higher after the election. Even though, President Trump called the stock market a “big, fat bubble” (which it is) during his campaign, investors keep inflating this bubble. This bubble that Trump talked scathingly about has grown bigger. This raging bull market has had the opposite effect on the United States. Americans are buying less gold than they have done since the start of the bull market in 1999. The U.S mint has reported a collapse in its sales figures. However, analysts believe that 2018 will bring about major changes to the gold market.

Ref:

https://economictimes.indiatimes.com/markets/commodities/news/higher-crop-prices-lift-rural-gold-demand/articleshow/62361143.cms

http://www.afr.com/business/perth-mint-gold-and-silver-coins-safe-haven-for-germans-20171102-gze1b8

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