DiscussWorldIssues - Socio-Economic Religion and Political Uncensored Debate - View Single Post - Gold Demand in India to Drop as Buyers Hoard Cash

**untostaronaf** · 07-16-2012, 08:19 PM

Statistics don't lie. But people don't understand statistics.

Price is where supply meets demand. So in order to understand demand, you have to view it in the context of price.

The article reports a 29% drop in bullion sales by weight from Q1 2011 to Q1 2012. But isn't demand defined by how much money Indians are willing to spend on gold?

During Q1 2011, India bought 290.6 tons, which is about 9.343 million ounces. The average price per ounce during that period was about 62,500 rupees/ounce. So Indians spent about 584 billion rupees on gold.

During Q1 2012, India bought 207.6 tons, which is about 6.675 million ounces. The average price per ounce during that period was about 84,500 rupees/ounce. So Indians spent about 564 billion rupees on gold.

So instead of the implied drop in demand of 29% percent based on amount sold, the demand measured in dollars only dropped about 3%. Not so much, in the face of a tough economy.

07-16-2012, 08:19 PM	#6
untostaronaf Join Date Oct 2005 Posts 448 Senior Member	Statistics don't lie. But people don't understand statistics. Price is where supply meets demand. So in order to understand demand, you have to view it in the context of price. The article reports a 29% drop in bullion sales by weight from Q1 2011 to Q1 2012. But isn't demand defined by how much money Indians are willing to spend on gold? During Q1 2011, India bought 290.6 tons, which is about 9.343 million ounces. The average price per ounce during that period was about 62,500 rupees/ounce. So Indians spent about 584 billion rupees on gold. During Q1 2012, India bought 207.6 tons, which is about 6.675 million ounces. The average price per ounce during that period was about 84,500 rupees/ounce. So Indians spent about 564 billion rupees on gold. So instead of the implied drop in demand of 29% percent based on amount sold, the demand measured in dollars only dropped about 3%. Not so much, in the face of a tough economy.
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