[DuePew]

Now this is an interesting article. According to the article, India has an over 7% inflation rate. Yet, folks are hoarding cash over gold. Furthermore, the price of gold in rupees is going down.

Why isn't demand for gold and price of gold reflected in the high inflation?

I wonder if we could see this in the US. High rates of inflation, yet folks still prefer cash over pms, and having the pms drop in dollars even due to the value falling off a cliff.

http://www.bloomberg.com/news/2012-0...d-cash-2-.html

Gold demand in India, the world’s biggest bullion importer, is poised to fall for a second year as consumers cut spending and hoard cash amid a slowdown in the economy, the World Gold Council said.

“Demand is going to be subdued, given the state of the economy and the sentiment,” Ajay Mitra, managing director, Middle East and India at the council, said in a phone interview from Mumbai. “People are preferring to stay invested in cash because of uncertain times. They aren’t very optimistic about the economy and the way the future looks.”