(Kitco News) – Increasing interest from Western investors is supporting a surge in gold prices around the world and in India, according to Sakhila Mirza, Deputy CEO of the London Bullion Market Association.
“Gold has always been interesting [in India] for at least the regional market, but on a global scale, it's definitely been getting a lot more attention, a lot more focus,” Mirza told CNBC India. “Where the shift is coming is gold is no longer just interesting in Asia. It's becoming more and more interesting in the West.”
Mirza said that Western investors are not only looking at gold as a near-term opportunity but are also getting involved on a long-term basis. “I think that's the beauty of gold, that you can actually get into gold but also know that you're going to have long-term stability through your investments,” she said. “That shift from not just focusing on the interest in Asia, but actually in the Western markets, is really supporting the price of gold.”
She was also asked about the LBMA’s current assessment of the Indian market, and the impact of the country’s recent cuts to import duties on gold.
“India is the second largest consumer market [for gold] in the world, and one of the most important markets, and not just from the perspective of jewelry but also the sentiment, the emotional, the festivals and everything that happens in India to engage in the gold market,” Mirza said. “The duty cut… it's my first conference where I've seen so much positivity, and whilst I've attended several conferences in India, this is perhaps the one where gold is at an all-time high. The duty cart has certainly supported demand.”
She added that she’s seeing a lot of focus on understanding how market participants can build a stronger industry in India. “With all this positive energy, engagement, but also sentiment, there is no better time to continue to focus on improving our practices, building businesses, and attracting new participants to help the industry grow,” she said.
Mirza also outlined the LBMA’s priorities in India for the year ahead.
“One of the biggest priorities is understanding the role of technology and how we can support this industry,” she said. “We've heard a lot about AI, blockchain, and understanding how can these technologies support efficiencies within this industry. At the LBMA, we've been involved in a project called Gold Bar Integrity together with the World Gold Council. Next year, we'll be launching an LBMA database that will help with data; data helps with transparency, transparency helps with trust. Through the LBMA Bar Integrity project, which is going to be engineered by the technology, we are hoping to build that trust and support, that transparency piece.”
“The technology on its own is not enough,” she added. “You've got to have the right standards that the technology can use to develop those markets. One thing that the LBMA has done forever has been this focus on continuous improvements of standards, and I have been working for the last 10 years on the responsible sourcing program, and the growing amount of interest in stakeholders wanting to know where that gold is coming from is increasing. That's a good sign.”
