The safe haven metal and the hedge against inflation- the gold is the most favored metal by most of the investors. After the 2008 Financial Crisis, the investors are not much confident in the stock market and its returns. Also, the US economic condition rallied down and the world’s top economy downsized whereas China emerged as the top economy representing the Asian economy. The other emerging economies in Asia are India, Vietnam, Indonesia, Thailand and Malaysia.

During the strong US Dollar, most of the Asian currencies down trended leading to ballooning current account deficit (CAD) in their respective economies. Considering Indian economy, it had widened its CAD by USD 88 billion i.e. about 4.8% of the GDP for the fiscal ended March 31. The USD per INR reached to the life time low of 68.86 on August 28. After the Fed’s press release, the USD-INR reached to 63.58 on 19th September, 01:00 UTC. It has averaged to around 62 in the week long and is INR 62.70 per USD today.

Indonesia, one of the emerging Asian economies experienced a record CAD this year and has a higher level of inflation since 2009. The Indonesian currency, Rupiah down fell by 11% in the second quarter and is the worst performer among the 24 emerging market currencies. Indonesia was once considered as one of ‘Asian Tigers’. The next emerging market is the Thailand. Thailand with a GDP 5.8% in the first quarter dropped down its GDP level in the second quarter to 2.8% and is a progressively growing economy in Asian region.

Thailand is also one of the biggest importers of gold and was the third largest Asian importer of gold after India and China. It is the seventh largest importer of gold in the world. Thailand’s cultural perspective has intruded it to buy and store gold as wealth. This has increased the demand in the Asian region for bullion bars and coins and jewelers’ products. Indonesia is expected to import 200 metric tons of gold in this current year against its import of 92 tons in the previous year. Demand for gold is high as the gold price has down turned. The demand in Thailand rose by 58% to 26.6 tons versus the second quarter from the year earlier. China and India are the other two large demanders of gold though India has halted its demand by 2/3 by imposing taxes up to 10% on imports.

The Fed’s response to the ‘not’ tapering the $85 billion assets purchases has upgraded the Asian economies for a short run and the price for the safe haven metal has rallied down. The decreased price of gold has increased the demand for gold in the Asian region as most of the Asian economies prefer gold to other metals for their festive seasons and is considered as a cultural emblem. So, with the fall in price the demand is ever increasing in the bullion market for gold.