Rising Gold Reserves – Indian Economy 2020
As the Global Indices (Stock Market) continues to rise, the investment in Gold is in consolidation phase as in volatile in the recent weeks. India has been in slowdown on Economy since the year 2018. Accordingly, the Global economic indicators are also not in a favorable position.
The Price of Gold, which has not risen between 2011-2018, however it has risen sharply over the past year and a half. The Gold ETF schemes has generated around 38 Percent returns in the last one year. Meanwhile, the BSE Sensex has grown by only 6 Percent in the past 52 week period.
India’s Trade deficit is rising again after Unlock of Covid-19. The Balance of Trade at the end of August 2020, was USD 6.77 Billion. Exports fell 13 Percent to USD 22.7 Billion, where imports fell 26 Percent to USD 26.47 Billion.
Exports of Gems and Jewellery, Petroleum products declined significantly in the month of August 2020. But the Gold imports rose to USD 3.7 Billion last month from USD 1.4 Billion in August 2019. The Central bank generally increases the Gold reserves during the Recession times.
India’s Gold Reserves stood at 642 Tonnes in the First quarter of 2020, then 658 Tonnes in the second quarter of the Current year. Over the past 25 years, the Gold Reserves have been increased significantly, particularly 2008-2010 and currently now since 2018.
The Gold Reserves were almost doubled (nearly) in the past 12 years, which is post 2008 Recession. It is noteworthy that the CPI Retail Inflation stood at 6.69 Percent in the month of August 2020.
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