Nail salons across India are on a gold rush, with several firms on a buying spree, with Indian stocks having climbed for the past three days on expectations that the economy would pick up after a two-day ban on foreign exchange and the withdrawal of US troops from the country.
The spike in the market is seen as part of a recovery in the country, where a ban on the foreign exchange market has sparked an upswing in demand and prompted an increase in sales.
“We have seen the market surge over the last 24 hours and we have seen gold and silver stocks increase,” said Rajeev Kumar, president of the Indian Institute of Technology-Bombay (IIT-B), who is among those selling stocks in the stock market.
“This has given the government and the government-appointed regulator confidence to increase the amount of money available in the government’s treasury,” he said.
India’s gold price surged more than 400 per cent to around $3,800 an ounce on Monday, according to a Reuters tally of the most active metal prices across the globe.
It’s also the biggest rally in five days, according an estimate from London-based Bullion Market Research, which says the country’s gold and platinum prices have increased by 2.6 per cent and 2.4 per cent, respectively.
The surge in the gold market is also a reaction to the US presidential election, with President Donald Trump accusing China of stealing US manufacturing and manufacturing jobs in the United States.
Gold and silver are the biggest two global commodities in India, accounting for almost a third of India’s exports and a third, according a report by consultancy firm Genscape.
Gold has risen by almost 80 per cent over the past 12 months, while silver has risen 80 per 100 grams.
Gold prices have also surged since Trump announced he would withdraw the US troops, leading to a sharp fall in Indian equities and shares.
The government, meanwhile, is seeking to ease restrictions on foreign capital and is trying to persuade foreign investors to come back to India, as well as to boost manufacturing in the state.