India’s demonetization of it’s largest notes is merely a smokescreen for the pressures that exist in the world wide gold market.
The demonetization was a thinly veiled attempt by the Finance Minister at limiting the Indian populations ability to buy gold as they are going into the traditional wedding season.
Indians consume anywhere between 800 and 1000 tons of gold every year according to the World Gold Council.
This is severely diminished by making it impossible to purchase the gold with the demonetization of the Rs.500 and Rs.1000 notes.
Over the past several years, gold is been migrating from east to west at alarming rate. Refiner say that the sourcing of the gold for the Asian buyers had become problematic.