#50614
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Anonymous
Survivalist

OK, clue me in. Why will the price of gold drop merely because India is not importing it???

Wildartist, I don’t claim to understand the (il)logic of the rumored policy, and frankly have not chosen to take the time to research it enough to find out. I really only care about the outcome. But as far as your question is concerned, it’s a simple matter of supply and demand, I believe. If India (where gold is a HUGE consumer item among other uses) decides to ban imports, then the “demand” worldwide goes down, and therefore the supply goes up, hence lower prices. I was a bit surprised by the estimate of as much as a $200/oz drop in price, but the concept is still basic economics. Lower demand for the product means the mines will have a harder time selling it, and the price goes down. Then they cut back on production, and at these prices, some mines will shut down (some already have, or have been bought up).

Like all markets, they are subject to manipulation by nothing more than news stories – fake, speculative, or solid. And this story seems to have been gaining traction – despite the fact that there’s no proof that it’s really going to happen.