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India’s Demonetisation decision likely to affect Gold Market in the short term: World Gold Council (WGC) report

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Delhi, Jan 13, 2017: India’s demonetisation decision is likely to affect gold demand in the short term, a World Gold Council (WGC) outlook report released on Friday stated.

“In India, the government’s decision to remove large denomination rupee notes took around 86 per cent of India’s circulating cash out of its economy,” according to the Outlook 2017 – Global Economic Trends and their impact on gold, released by WGC.

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“While the purpose is to replace them with newly printed notes, we believe that the liquidity squeeze could have a temporary negative effect on economic growth, and may also affect gold demand in the short term.

“But more importantly, we believe that the transition to transparency and formalisation of the economy will lead to stronger Indian growth in the longer term, thus benefiting gold,” the report added.

The WGC said there are six major trends to be watched out for in 2017 from economic perspective that would impact the gold market.

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The trends are: Heightened political and geopolitical risks; currency depreciation; rising inflation expectations; inflated stock market valuations; long-term Asian growth and opening of new markets. The report said gold is becoming more mainstream. Gold-backed exchange traded funds made gold accessible to millions of investors, primarily in the West, over the past decade, but other markets continue to expand too.”

It said, “China has seen dramatic growth in recent years through gold accumulation plans, physically settled gold contracts in the Shanghai Gold Exchange. In Japan, pension funds have increased their gold holdings over the past few years.”

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In the corporate sector, more than 200 defined-benefit pension funds have invested in gold. In addition, more than 160 defined-contribution plans have added gold to their list of investments.

“We expect this trend to continue and expand into Western markets, where pension funds have had to rethink asset allocation strategies following prolonged exposure to low (and even negative) interest rates. In our view, this will result in structurally higher demand,” the report said.

“Innovation is evident across all markets, but at the end of last year one development stood out. The Accounting and Auditing Organisation of Islamic Financial Institutions (AAOIFI), with support from the World Gold Council, launched the Shari’ah Standard for Gold, opening up the Muslim world to gold investment,” it added. (IANS)

 

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Google Pay Users Can Now Even Buy Gold Through the App

The petitioner has sought direction to the RBI to stop Google Pay operation in India

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The app "Google Pay" displayed on a user's Smartphone.

Aiming to make Google Pay more useful for Indian users, Google on Thursday announced its partnership with MMTC-PAMP India for buying and selling gold through the application.

MMTC-PAMP India Pvt. Ltd is an internationally recognised metal and mining service provider.

“Google Pay users would be able to buy 99.99 per cent, 24 karat gold after this partnership with India’s only LBMA accredited gold refinery,” the company said in a statement.

With this, Google Pay users can purchase gold for any value that will be stored in secure vaults on their behalf by MMTC-PAMP. The users can buy and sell the gold any time at the latest price, refreshed every few minutes, as displayed on the Google Pay app.

Google Pay.

“Gold is core to Indian culture and tradition, making India the world’s second largest consumer of gold. Keeping this in mind, we introduced gold buying and selling feature on Google Pay for millions of Indians who can buy gold right from their mobile phones,” said Ambarish Kenghe, Director-Product Management, Google Pay, India.

The announcement came as the Delhi High Court on Wednesday asked the Reserve Bank of India (RBI) and Google India Digital Services Private Limited to file a reply on a plea alleging Google Pay not being listed as an authorised operator as per a list of the ‘Payment System Operators’.

Also Read- Indians Are Willing To Share Personal Information With Their Banks, Claims Study

A division bench of Chief Justice Rajendra Menon and Justice Anup Jairam Bhambhani issued notice to the RBI and Google India Digital Services Private Limited on a PIL filed by Abhijit Mishra.

The petitioner has sought direction to the RBI to stop Google Pay operation in India. (IANS)