How Much Will Indian Wedding Season Impact Gold Prices? [DETAILS]

A close up of a couple getting married during Indian wedding season

As we all have seen — over the course of time —the market does what it wants.  That age-old trader saying is proving out again, this time for gold demand in India.  The year 2017 started with concerns that India would impose a huge new tax rate on gold.

This was expected to reduce gold demand from India.  Instead we got almost exactly the opposite – the new rate of 3% is just slightly higher than the old central rate, and the legislation eliminated some other possible tax layers.  Possibly.  Indications are that many business owners are confused by the new tax legislation.

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Doubtless trying to reduce their risk, manufacturers and storeowners restocked heavily in June,  driving up gold imports to an estimated 75 tonnes from 22.7 for this period last year.  If the estimate is correct, total imports for 2017 are up 161% over the first half of last year.

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What remains to be seen is whether demand will continue or if the surge in buying is simply business people doing their buying earlier.  Typically India marriage season demand starts in the early weeks of August.  So we probably won’t know for a few months whether this is a new level of demand, or they’ve robbed August to pay May.

World gold prices aren’t reacting on this news so it’s best we don’t go getting all excited quite yet.  But as India’s marriage season is one of the largest retail demands for gold we will surely keep an eye on the situation.

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Signed, The Gold Enthusiast

DISCLOSURE: No specific securities were mentioned in this article.  The author is long NUGT and JNUG and may add to or sell these positions in the next 48 hours.

About the author

Mike Hammer

Mike Hammer has had a wide-ranging career, with trading and investing as a continuing theme. Mike graduated from UC Berkeley with a business degree, then worked with Macy's in their operations arm. He left Macy's and spent a summer trading his own account, which taught him a lot about trading in general and markets in particular. Trading through the Black Monday and the Crash of 1987 showed him how most people are unprepared for upheavals in their trading. He then joined Waddell & Reed as a financial advisor, helping regular people understand their finances and meet their life goals.

Then came the usual story - Mike met and married the lady of his dreams. They moved to upstate New York, where Mike worked first for a small manufacturing consulting company, then Cornell University. While loving the work and the higher-education atmosphere, Mike missed the world of finance. Eventually, he signed up for stock trading coaching with the Adam Mesh Trading Group, to learn from people who understood modern markets. Within a year, Adam asked Mike to become a stock trading coach.

Since then, Mike has trained over 200 individuals, spoke at several national conventions, and is a frequent contributor to conference calls across the Adam Mesh community. Mike writes The Gold Enthusiast daily newsletter, runs the Golden Hammer trading service, and participates in the Mesh Private Portfolio. He also keeps a position in international education which keep him in touch with "the student mindset". Mike closely follows the gold, energy, and financial sectors. His motto is "Plan your trade, then trade your plan!"

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