LONDON (Commodity Online): UBS strategist Edel Tully said that jewelry stories she visited last week in India seemed to be busy buying and selling gold, providing a reminder that the gold and India have an “impenetrable marriage.”
Edel Tully added that: “Our main takeaway is that Indian gold demand is quite likely to show a year-on-year increase in 2012. Gold remains so ingrained in India's culture that it's difficult to foresee a time when gold isn't bought, even above $2,000.”
“The Indian market can adjust to higher prices, as it's shown for the past 10 years. But the picture is not black-and-white--the strength of physical demand will ultimately be determined by the volatility of gold prices (they prefer stability), the direction of the rupee and on factors such as additional import duties,” Edel Tully concluded.
