2016-05-14 Sat

In the first quarter of 2016, demand for Gold bar and gold coins reduced by 31.5% as per reports by World Gold Council. Investments were almost nil in January which reduced in February and came to a standstill in March.

The major reason behind this was the sharp increase in gold prices which was further affected by the government’s budget announcement. The duty hike led to strikes by jewellery stores which also blocked channels through which the general public make such kind of investments.

The RBI also permitted banks to sell the Indian Gold Coin during this quarter. Minted at the Indian government mint, these coins are hallmarked by the Bureau of Indian Standards (BIS). Indian Overseas Bank began distributing the coins in March first and there are official announcements that they will be distributed through India's post office network as well. Officials say that this initiative could relieve supply-side pressure on investment demand.