Gold prices may at risk if Indian monsoon disappoints
Mumbai-India (June 11) India’s monsoon season is off to a slow start, and this could have implications for gold should it continue, said investor and newsletter writer Dennis Gartman.
Much of the country’s farmland does not have irrigation, leaving farmers dependent upon monsoon rains for their crops. Indian Earth Sciences Minister Jitendra Singh has said below-average rainfall is expected during the 2014 monsoon season.
“Of concern to us is the weather in India, and yes weather can affect gold prices just as it can affect grain prices for thus far the much-anticipated and much-needed Indian monsoon is nearly two weeks late and without the monsoons, India shall move from being a net supplier of grain to become a net buyer instead,” said Gartman, who has long positions in gold against the Japanese yen and euro.
A lack of rainfall would have a detrimental effect upon the wealth of Indian farmers, which in turn could inhibit the ability to buy gold in one of the world’s key gold-consuming nations, he explained.
A lack of rainfall would have a detrimental effect upon the wealth of Indian farmers, which in turn could inhibit the ability to buy gold in one of the world's key gold-consuming nations.