Thursday, February 24, 2011

Inflation raging in India

Courtesy of an industrious reader David, who scours the globe gathering stories of interest, comes this story reinforcing the challenges being faced by nearly all of the nations across Asia due to the rising cost of food, not to mention overall inflation pressures in general.

This is why the gold and silver markets will find buying on dips in price.

Asian demand will keep a solid floor of support beneath these markets that we will be able to discern from watching the price charts. Those in the West may throw the metals away dismissing inflation concerns, but those concerns are very much alive and unfortunatey all too well in Asia.

Thousands protest against high food prices in Delhi
You can read the entire story here:
http://www.bbc.co.uk/news/world-south-asia-12549050
Thousands of people have gathered in the Indian capital, Delhi, to take part in a rally to protest against rising food prices and unemployment.

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2 comments:

  1. ...coswilFebruary 24, 2011 at 6:45 PM

    What about this though. If inflation is rising and food prices are becoming a protesting issue and the stabilizing of the country depends on it, will not the countries raise their interest rates in effort to raise the value of their currency to offset the the increase the cost of food. If this comes about then will not the investors in gold leave to take up the growth from currency. Thus leaving the safe haven for growth....coswil

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  2. Trader DanFebruary 24, 2011 at 7:05 PM

    coswil - as long as REAL, not nominal, rates are negative, gold will thrive. Generally speaking, CEntral Bankers are behind the inflation curve, raising rates at a rate that lags the rate of inflation. Not until they get rates to the point where the REAL yield is positive (exceeds the rate of inflation) will gold be affected.

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