India turns from gold to equities
by Gill Montia

While the gold price reached a record $914 oz this week, Indian investors are turning to gold equities rather than the physical metal.
The nation currently buys a third of the world’s gold output but today even some of the country’s bullion dealers are selling the metal in favour of stock market gains.
The trend seems to be driven by fears of a correction in the gold price, following last year’s rise of over 30%.
In recent times, many Indian investors preferred gold to the stock market and although the current shift towards stocks is slow, its affect on gold is already evident.
Gold imports by India fell as much as a fifth last in 2007 and could fall further if the price of the metal stays high.
While bullion analysts are optimistic, with many expecting the price to test the $1,000 oz barrier before the end of this year, the Indian jewellery market is already experiencing a downturn and a further 10% rise could prove disastrous.
Gold jewellery has traditionally bee seen as an auspicious gift for Indian marriages because of its investment value.
However, confidence in the Indian stock market is rapidly increasing and those with an interest in equities are beginning to lose their fascination with gold.
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