India’s current account deficit has long been a source of concern for policymakers, and the government has estimated that around 80% of the deficit is the result of gold imports.
While the government is widely expected to introduce additional taxes for gold imports, the Reserve bank of India (RBI) has indicated that financial innovation could also be of assistance.
The RBI has said that given the strong demand for gold in the country, the development of gold-linked products may help reduce demand for physical gold as investors will be able to access gold returns through financial products as an alternative.
Key events to watch this week
The ECB meeting will be watched closely by investors to assess the likelihood of further monetary easing by the central bank.
Industrial production data coming from Germany and UK will also be watched closely as will US earnings results and continued news flows on the budget and debt ceiling debate.
ETFS Physical Swiss Gold Shares (NYSEArca: SGOL)
