Lack of "good days"?

The Govt might have launched the paper on Gold Monetization scheme but for gold itself, this year does not seem to hold too much shine.

The main driver for gold demand is the big fat Indian wedding and these weddings are dependent on auspicious days. So this year, there is a 40% drop in the number of auspicious days for weddings in the second half of the year – the main marriage season. And that means, that many weddings have been postponed for next year, which in turn means, demand for gold too has been postponed to next year.

Thanks to the Hindu calendar, demand for jewellery is expected to fall 30% (YoY) in second half and this could be much below the first half levels too. Signs of weakness have already emerged with sellers giving some 2% discount per ounce yet buyers are not biting the bait. Apart from lesser “good days” erratic monsoon, poor crop and higher food inflation scare it also keeping away Rural India, which buys 75% of India’s gold.

This could indirectly benefit the Govt which could see a drop in need to import gold, which in turn bodes well for the macro economic situation. Maybe the temples will also less gold coming into their hundi’s this year?