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Have year-end economic issues suppressed bullion market prices?

*The Wall Street Journal, by B. Mukherji and D. Nayak, December 26, 2012

”Gold demand in India, the world’s largest market, has flattened out again after briefly rising due to festival demand in the third quarter of this year as investors eye stronger gains from equities.

Investors have been drawn to gold because it has outperformed other asset classes in the last couple of years, but some of its sheen is wearing thin as they are anticipating that the government would likely raise an import tax during the budget in February to contain the current account deficit.

Gold has also belied widespread expectation that its prices would rise globally on U.S quantitative easing, but worries over the fiscal cliff situation has damped prices in the past few weeks.

‘If prices have gone up, then the investment buying would have picked up in India,’ said Gnanasekhar Thiagarajan, director of Commtrendz Risk Management.

Several investors booked profits in gold in November and December when Indian prices touched near record highs due to the weak value of rupee to the dollar.”

*This information is solely an excerpt of a third-party publication and is incomplete. Please subscribe to the referenced publication for the full article. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.

Monex Bullion Investor