India Gold Imports Hit Record As "Price Is No Longer A Factor"

Tyler Durden's picture

All those who continue ridiculing gold, saying it has no utility, tend to forget one thing: it just happens to be the ultimate status symbol (especially for the nouveau riche). And who these days wants to demonstrate status (and has a lot of nouveau richness)? Why, the 2+ billion consumers who are benefiting from the biggest growth story in the world, i.e., China and India. According to the World Gold Council, gold demand in India in the last year reached a record. Per Bloomberg: "Purchases were about 800 metric tons, compared with 557 tons in 2009,
Ajay Mitra, managing director for India and the Middle East at the
producer-funded group, said today in a phone interview from Dubai." But how is that possible? After all gold prices surged in 2010 compared to 2009: is gold demand supposed to be inelastic? Surely you jest? Well, no: "Our assessment is demand will continue to be strong,” [Mitra] said. “Price is no longer a factor.”" Re-reading the bolded sentence a few times just may explain why PM distribution centers with actual physical inventories have suddenly become rarer than hen's teeth.

From Bloomberg:

Gold imports by India, the biggest bullion consumer, likely reached a record last year driven by investment demand, according to the World Gold Council.

Purchases were about 800 metric tons, compared with 557 tons in 2009, Ajay Mitra, managing director for India and the Middle East at the producer-funded group, said today in a phone interview from Dubai.

Imports at that level “would be the highest for India in its history,” he said. The group hasn’t released final data for last year. Purchases in 2010 may exceed 750 tons, Mitra said Nov. 17. The Bombay Bullion Association said Jan. 3 imports probably totaled 700 tons in 2010.

Gold for immediate delivery rallied 30 percent last year to reach a record $1,431.25 an ounce on Dec. 7 as investors bought the metal as a protector of wealth. Demand for bullion as an investment in India surged 73 percent in the year ended Sept. 30, according to World Gold Council data. Purchases by the Asian country this year will remain “strong,” said Mitra.

“Our assessment is demand will continue to be strong,” he said. “Price is no longer a factor.”

 Investment demand for gold in India grew faster than the 62 percent gain in jewelry demand in the same period, according council data.

“It’s been demand driven with investment in mind,” Mitra said. “While jewelry is a form in which a lot of consumers do buy in India, the core proposition really is security for the future, which is the investment angle for buying into gold.”

And that's just India. Next, throw China into the pot, mix, and let simmer...

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Bearster's picture

If gold were bought only because it is a status symbol, then every gold owner should be worried when this crazy fad/bubble would die out and collapse.

But gold happens to be money.  That is why I am not worried.

Gully Foyle's picture

Bearster

Except in the case of India Gold is also involved with various Religious celebrations. And obviously jewelry.

This doesn't equate with US, or anywhere else, that does not have the same emphasis on other than economic factors.

Armchair Bear's picture

Home

Damn...update from Markets entity...

Too many immediacy values with too high sums in the impact, duration, and tension levels to ignore so had to stop work to extract and post the update below. Rest of the report better not be like this or it will take forever....

Extract from upcoming Shape Report: Markets entity:

As 2010 fades rapidly from sight, and mind, we note that the Markets entity is pretty much as its primary supporting descriptors would have it, a [basket (of) crises]. The [basket-case markets] set has secondary support coming from [interwoven] and [inextricably twined] which are themselves both supported at their primary levels by [bad foods] which, given its supporting sets, we are interpreting as [indigestible products]. These [indigestible (financial) products] are about to make [minions (within markets)] go into [spasms] of [violent puking]. This is indicated to be a [planet wide] level event, that in its turn brings [international grievances] and [inter country tensions] to a [visible] and [frightening] level that will be described (in the msm propaganda press) as being a [boil over] situation. The interpretation that we have about the [indigestible products] is that they fall into the category of [derivatives] in general, but specifically there are linguistics around the idea of a [gold price tied/bound] form of [derivative] that [fails] in an [instant] due to a [crisis] in the [gold/precious metals market]. This forecast is based on a lot of immediacy data value sets and so may be within days of happening, and likely will be occurring by the time that this Shape report is published.

 

clif

January 11, 2011

Turd Ferguson's picture

Has anyone else noticed that nearly everything for copper to crude to soybeans are back near 1/3/11 levels yet gold is still $60 off its high? Thanks, Blythe!

http://tfmetalsreport.blogspot.com/2011/01/getting-frustrated.html

Kaiser Sousa's picture

Turd -

remember not to long ago when i went off here cause they slammed both forms of real money as they were attemtpting to go balistic? u told me to chill out...

now u understand why i was and continue to be pissed...the shit is just way to fucking obivious and Chilton and those bitch ass regulators just stand by with their hands n their pants....

thanks for ur site...im a fan

ZEITGEIST's picture

to you and the turd....we need to be patient...the physical market is going to strangle the hell out of the paper market...it will shock us all....just patience is all we need...it will be one for the ages...just go long and stay long.....

Kaiser Sousa's picture

encouragement appreciated...just hate bankers and their worthless debt coupons...

Salute.......

midtowng's picture

Unless you are a short-term trader, in which case you would be trading paper gold, then that $60 doesn't mean sh*t. Relax.

Praetor's picture

Tell me about it, about to marry an Indian lady. Engagement rings of gold only (diamonds not required) and for marriage a Mr T 22 carat gold chain. These Indians know about wealth preservation!

oozsan's picture

... and it's been money for a long time, since pre-history infact.

goldfish1's picture

"The Max Keiser, “Crash Banksters, Buy Silver” program is working. Max and Bid Bullion will launch a limited edition of silver coins. 25,000 units of 1/10, ¼, ½, 1 oz and 5 oz silver coins with max on one side and on the other side “Global Insurrection Against Corporate Occupation” and or “Crash Banksters, Buy Silver.” They will be .999 silver. Max will not benefit in anyway from their sale." B. Chapman 1/12/11

RobotTrader's picture

NEM is probing the lows with less than half the volume from last week's panic.

If the test is successful, then we should see a bullish spring off the lows.

Turd Ferguson's picture

Yes, thanks Robo. Good stuff.

Strider52's picture

Geez, I usually mouse-wheel right over Robo's comments. I actually had to go back and look...

Samsonov's picture

NEM's been a dissapointment for me.  I couldn't find anything really wrong with the company and it seemed like a good value when I bought in Nov.  At that same time I acquired FCX, which is also a copper/gold company, and it's doing great.  What gives?

Mr Lennon Hendrix's picture

I think the PPT own equity in mining corporations. 

bonddude's picture

Considering ore rich mother lode property.

Cognitive Dissonance's picture

Danger Will Robinson. Gold induced tsunami coming.

CU1981's picture

In case of Fiat Collapse, go to high GOLD or SILVER.

 

There, I fixed it for you ;-)

Cognitive Dissonance's picture

LOL

Banzai7 Labs has invited me (and Bruce Krasting for his brilliant weasel pictures) to his photo-shop satire clinic next month. (The airfare to Hong Kong is a killer. :>))

Once I'm properly trained by the great WB7 himself I'll be able to mark up the images. Until then I'm reduced to crayons and magic markers. :>)

Arius's picture

how about holding hands to hold the tide? :-)

thats why i do not really get the point of supressing gold to such ridiculous low level and let china, india and everyother sucker buy it so cheaply

goldfish1's picture

The point is to buy time while bankrupting the american people and taking over our country.

doomandbloom's picture

remember a lot of chinese couples did not marry in 2010 ( year of the tiger).

All those pending marriages in 2011 would probably increase sale of gold further.... me thinks.

 

Temporalist's picture

Don't forget to add Russia and Vietnam too.  Wonder if those rioting Bangladeshis might decide to drop their stocks and pick up some more hard assets.

Internet Tough Guy's picture

Indians understand the price/value disconnect. The price of gold at the margin is understated.

Oh regional Indian's picture

Some oh regional thinking indians do or are trying to at any rate! ;-)

http://aadivaahan.wordpress.com/2010/07/24/value-vs-price/

ORI

DoChenRollingBearing's picture

+++

Gold is a bargain under $1500.  Probably a bargain under $2000.

One man's opinion, but much influenced by a friend of a friend of another...

Don Birnam's picture

Old World status symbol/cache: 18- and 22-kt jewelry; fine gold ( .999 ) coin and bullion. Tangible wealth.

New World status symbol/cache: 60" Sony Bravia 3D tv w/goggles, on a Best Buy credit card. 

malikai's picture

Note that paying the credit card bill is optional. However, it is somewhat difficult to buy gold or silver on the credit card.

Xibalba's picture

Apmex takes credit cards....

malikai's picture

True, but don't they charge a %premium for CC purchases? Here in Britain, I have seen a couple places on the intarnet which will take CCs but all of them charge extra. Also most of the small shops I've been to don't take credit cards at all.

Pladizow's picture

Why use a medium that leaves a paper record?????????

Shell Game's picture

For the civil disobedience of it.  JPM/Chase CC now offering 0% apr until 2012.  Oh, the irony..

malikai's picture

No way around a paper record here. Any purchase of PMs in the UK leaves a paper trail. Supposedly it is to prevent money laundering (lie).

malikai's picture

Sure you can. Cash or debit cards, some places even take credit cards. However, when you buy or sell, they require proof of identity and address. This is usually in the form of a drivers license/passport and a recent utility bill. 

pods's picture

It just makes it easier for them in that they wont have to open up all the safe deposit boxes, they will have a nice list to go off of.

pods

StychoKiller's picture

D@mn, if only I hadn't lost all my Gold chips in last night's poker game...

DaBernank's picture

Hop a flight down to Vienna, mate. Purchase anonymously (under E15,000) at the mint.

http://www.austrian-mint.at/shop_lokale?l=en

You know you like the Philharmonics, c'mon.

Midas's picture

Someone let me know if Jon Nadler has anything interesting to say.   I got tired of him talking about how savvy the Indians were on timing their gold purchases on only pullbacks.  If they listened to Nadster they wouldn't have bought an ounce in the last three years.

TideFighter's picture

Nads will state how the scrap meltdown inventories have dropped below the amount that Indians are buying, or some other stupid shit. I stopped reading him long ago, when I found that bald spot from scratching my head so much. He has to be somebody's brother-in-law over there at Kitsmo.

mrgneiss's picture

They have a huge unallocated pm pool, can you say pm run?

hedgeless_horseman's picture

Price no longer a factor.

Debt no longer a factor.

Inflation no longer a factor.

FASB Rule 157 no longer a factor.

M3 no longer a factor.

Rule of Law for GM bond holders no longer a factor.

American troops occupy foreign country in longest American war no longer a factor.

Declining global oil supply no longer a factor.

Increasing global oil demand no longer a factor.

Average calorie eaten by an American travels more than 1,000 miles no longer a factor.

All Western American aquifers depleated beyond refill in a lifetime no longer a factor.

 

JW n FL's picture

plus .5... your tone lacked (that rule 48 just shit on me) feeling I was looking for.

other than my feelings, the info was spot on.

Caviar Emptor's picture

No longer a factor....until it's an inescapable factor. 

We may be on the last giddy dash the Selma and Louise gun-the-car-over-the-cliff moment in history. It's happened before. 

Bearster's picture

You make some good points, I especially think the breakdown of the rule of law is important.

But why focus on the distance that food travels and ignore that all locations are not created equal when it comes to mining or agriculture.  Mao caused a mass starvation by declaring that all provinces had to produce iron ore.  We could cause a similar problem by prohibiting shipping for food and forcing all locales to grow their own.  Not to mention even if your only concern was carbon, and not cost, quality, human lives destroyed, etc., it is still more efficient to grow crops in the best place with less (petro) fertilizer than to grow them locally and fertilize the crap out of them to get them to grow at all.

hedgeless_horseman's picture

...why focus on the distance that food travels and ignore that all locations are not created equal...?

You are absolutely right!  Sometimes I forget that:

Declining global oil supply no longer a factor!

Increasing global oil demand no longer a factor!

...and may I add...

Overpopulation in China and India no longer a factor.

Strider52's picture

Max Factor no longer a factor.

Factories no longer a factor.

 

OK, the word 'factor' is starting to sound wierd.

goldfish1's picture

All Western American aquifers depleated beyond refill in a lifetime no longer a factor.

Sometimes the thought occurs that they are bankrupting the great lake states precisely due to their ownership of the great lakes.