Fasten your seatbelts, or hold on to your earrings. The Indian gold industry is set to spring to life thanks to the government’s liberalised approach to mining, the plans that private miners are finalising for the country, and the fact that there could be huge reserves of gold lying in wait for them, untapped and little-known.
The Supreme Court ruling on the need for a transparent auction policy for natural assets gave a fillip to the sector. More private mines are being set up. And there is a possibility that mining will spread to regions outside the traditional strongholds of southern India.
Industry experts say that the potential for gold recovery from ore lying in heaps around older gold mines – especially the now-defunct Kolar, in Karnataka – could be huge. Indians’ insatiable passion for the yellow metal will ensure that prices don’t fall any time soon, incentive enough for more players to get into the game.
This perfect, and pleasant, storm of factors could lead to a gold rush in a country that loves gold. Investors would do well to keep it on their radar. And it wouldn’t be a minute too soon. Chinese gold production has vaulted 150 times in the last 24 years, while India’s has been stagnant.
Rising prices
There is a buzz in the markets that gold prices could get firmer in the coming days. They have been firming up for some time already.
The reasons sound logical, even plausible. But it must be remembered that markets do not necessarily follow logic. Speculation can be quite whimsical at times, defying almost every explanation. We would therefore like to re-emphasise that the reasons listed below are not to be construed as a recommendation for a ‘buy’.
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