Monsoon in India as a barometer for the gold price

- Disclosure/Advertisement - This article appears on behalf of Mogotes Metals Inc. and Arizona Sonoran Copper Company Inc., companies with which Swiss Resource Capital AG (SRC) has paid IR advisory agreements. Creator: Swiss Resource Capital AG · Author: Ingrid Heinritzi · First publication: 07.08.2024, 09:30, Europe/Berlin

India is one of the largest demand markets for gold. When agricultural production is good – more than half of the Indian population works in agriculture – the income of the agricultural population is also good. Gold has a special status in India. It is given as a gift at festivals and weddings and serves as a store of value, thus providing security. It often replaces bank deposits. If rainfall is favorable, demand for gold rises, as has been evident in recent decades. This usually happens in the fall, when the harvests have been brought in. And this can even have a significant impact on the price of gold. Of course, uncertainties, the development of the US dollar, and economic developments also play a role.

Looking at this year's monsoon season, rainfall during the southwest monsoon has been above average so far, at around four percent. In July, rainfall was six percent above normal, and in June it was even nine percent above normal. From the end of May to today, rainfall has been twelve percent higher than average. Relatively little rainfall fell in eastern India and parts of Uttar Pradesh, but this is unlikely to have a significant impact as these regions are fed by rivers. This year, the monsoon started early and sowing (up to July 4) was strong, with an increase of 16 percent.

By the end of July, more than 75 percent of the land had been sown, which is more than in the last two years. Everything looks set for a good monsoon, so we can be confident about consumption growth in rural areas. Strong demand for gold should therefore be seen in the fall. This is good for the gold price and thus also for companies with gold in their projects.

Fury Gold Mines - https://www.commodity-tv.com/play/mining-news-flash-with-miata-metals-fury-gold-mines-and-southern-cross-gold/ - has a gold and mineral exploration portfolio totaling over 157,000 hectares in Quebec. The well-known Agnico Eagle has invested in Fury Gold Mines.

Sierra Madre Gold and Silver - https://www.commodity-tv.com/play/mining-news-flash-with-sierra-madre-gold-and-silver-fury-gold-mines-and-arizona-sonoran-copper/ - successfully started production at its Guitarra project in Mexico at the beginning of the year. A second promising project in Mexico is part of the portfolio.

Current company information and press releases from Sierra Madre Gold and Silver (- https://www.resource-capital.ch/de/unternehmen/sierra-madre-gold-and-silver-ltd/ -) and Fury Gold Mines (- https://www.resource-capital.ch/de/unternehmen/fury-gold-mines-ltd/ -).

Sources for the monsoon: Bank of America

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