Silver is winning India’s “War on Gold”

Sprott Group's picture

As India continues to wage war with gold, investors are seeking out the yellow metal through any means available. Reports today suggest that there is not enough room on commercial flights into Dubai for all those investors seeking to purchase gold. “I cannot find a place for transporting gold on Emirates, on BA or Swiss Airlines this weekend,” lamented Tarek El Mdaka, the managing director of Kaloti Gold in Dubai adding he is shipping as much as 2 tonnes of gold every day.1 As we had suspected, it would appear that the Indian gold trade has moved offshore to avoid the restrictions on imports and extra taxes imposed. However, this is not the biggest change in the Indian precious metals market – silver imports have exploded.

Silver has not been exposed to the same import restrictions that gold has and recent silver import figures confirm that investors have flocked to silver, likely as a substitute for their desire for gold. And why shouldn’t they? With limited bank branches in the country, owning precious metals is synonymous with savings and security. While it seems that the larger investors have moved their gold purchases offshore, we suspect that the majority of Indian investors have turned to silver as a substitute for gold. The recent import numbers are staggering.

While India imported 1,900 tonnes of silver in 2012, in the first five months of 2013 alone, imports have touched 2,400 tonnes. According to industry estimates, silver imports during the January-March quarter stood at 760 tonnes. Imports shot up to 720 tonnes in April alone, and in May they further swelled by 920 tonnes.2 Let’s put these numbers in perspective, according to the Silver Institute, the world produced 24,478 tonnes of silver in 2012, implying that Indians have imported almost 10% of world production so far this year. If they continue to import at the same rate as they have in May, over the next 12 months India could import close to half of world silver production which is a truly staggering shift in demand for silver.

The next salvo in the war on gold occurs this Monday July 1st when “The All India Gems and Jewellery Trade Federation” (representing 90% of jewelers in India) declares a ban on its members selling gold bars and coins. It’s almost unbelievable that this retail federation would impose an all-out ban on purchasing gold for investment purposes, but all is fair in love and war. However, Indians aren’t phased and are shrugging off this ban and investing their rupee’s in silver instead.

This new import data shows that the victor in India’s “War on Gold” – will be silver.


1 Gold rush 2013 style has Dubai scrambling.

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Mr. Hudson's picture

Gold and silver will spike higher. What is the plan for those holding onto gold and silver? At some point do you sell? If we have total, complete financial collapse, will it be safe (and legal) to own (or hoard) gold and silver?

KingdomKum's picture

we few,  we happy few,  we band of silver holders  .  .  .




Silver Bitchez  !

toadold's picture

Where can I buy some Indian penny stocks?

WmMcK's picture

Don't know, but I have 400 Indian Head pennies for sale.

Will trade for Ag.

assistedliving's picture

i did tell the mrs we bought some HL today at $2.82

i didnt tell her we own 50k @ $6

thewayitis's picture


 GOT SILVER?   Slver.....Its what is for breakfast. Breakfast of champions......



janchup's picture

"Indians aren’t phased..." 

Sprott, the word is fazed.

coolpajim's picture

Though I agree the meaning would be enhanced by the use of "fased", it is also probably true the Indians were not "phased".

Dr. Sandi's picture

I won't be concerned until Indians buying PMs are 'phasored.' That would indicate a rather unhealthy trend.

MeelionDollerBogus's picture

silver vs gold, recent price action correlation:

toadold's picture

At one time I had Zero Hedge bookmarked in my Finance folder, then I moved it over to my Poiitics folder.....Should I go aheand and move it over to my Entertainment folder?  The business reporters, the politicians, and the banking officials are starting to get kind of entertainig in in their explanations.  "Damn it don't look at the prices of prescious metals over decades and centuries, all that counts is the last year!", "No Marvin what counts is the last 5 minutes!"

Is Walmart or Sam's selling PM's yet?

El Oregonian's picture

Silver Bullets KILL Bankster Werewolves.

bjfish's picture

And you can buy silver bullets at  (for real)  This is just FYI - I'm not pitchin for them.

cynicalskeptic's picture

You may be dead before you get your ammo......  not ther fastest when it comes to shipping

mt paul's picture

bought some 375 H+H rounds today

3.50 each x 200..


squirrel problems...

WTFUD's picture

Silver&Gold; Horse&Cart; Republicans&Democrats; Love&Marriage

MrBoompi's picture

At these prices miners can't afford to produce silver for much longer.  When supply completely dries up, will people finally tell the paper pushers and their ridiculous spot prices to go to hell?



Dewey Cheatum Howe's picture

Future contracts come due the miners will not negotiate for lower than production cost. Watch and see. The markets are going to split and hell breaks loose in the paper market once that happens.

unwashedmass's picture

i'm going to wait till the scheduled metals bash post jobs number friday. then, at 8:31, i will start my truck backing in. 

and can we all say how utterly insane it is that we all KNOW now that Friday will be a major manipulation day? I mean the fraud is now so staggering, so blatant.....

AustrianJim's picture

>>Indians aren’t phased



Imminent Crucible's picture

HaHA! A spelling Nazi. I'm sure that he meant "Indians are phasing out of gold, into silver".

I'm glad you corrected that so I didn't have to be the spelling Nazi.

TheFourthStooge-ing's picture

The Indians are neither phased nor flanged. They're using a Leslie speaker unit.

NidStyles's picture

I bought last week, and will be buying more again this week. I'm on the Silver train 100% now. It's too good of a deal at sub-20 and still good at 25.

MeelionDollerBogus's picture

I think with how low prices dropped I'm hoppin' on the gold train myself.

Skin666's picture

Read Two Short Planks blog on investing in gold and silver NidStyles...

I've scaled back silver and concentrated more on Au...


Meatier Shower's picture

As long as the gold/silver ratio is a ridiculous 64, silver is the better value.

Lord Koos's picture

Yeah the ratio is pretty stretched.  But I think it's more likely that gold will go down for a time before silver will go up. The industrial demand for silver is going like copper -- down.

Eagle Keeper's picture

Maybe we're not at the bottom, but I just took this opportunity to stack a few more.....

joak's picture

This data convinced me to buy some more coins last week-end, although I usually buy gold (because of taxes on silver). I wish I had more fiat to spend.

WTFx10's picture

I wish I had more fiat to exchange for something of value.

Fixed it.

RaceToTheBottom's picture

Yep, keep trying to squeeze that overinflated balloon......  Oh, it is expanding over here...  Now over here....

PT's picture

You'd better blow some more air into it.  That'll stop it from turning into a bubble ...

becky quick and her beautiful mouth's picture

seriously, if you are not buying silver at $20 and change, you are retarded.

BidnessMan's picture

Wish my usual silver seller had some to sell.

Debeachesand Jerseyshores's picture

I have to agree with you that Silver at $20 is a bargain.

GrinandBearit's picture

I was telling people that when it was $5.00. 

I was buying 90% bags then and no one wanted them.

shutdown's picture

I was telling people that at $35.00.

Troll Magnet's picture

Sprott was telling people that at $45.  Behind the scenes, Sprott was dumping silver like a MOFO.


FUCK ERIC SPROTT and his Goldman Sachs-wannabe ass.

WmMcK's picture

I'll be telling people that at $50.36 and beyond, they still will not listen, though.

tmosley's picture

God forbid people make money on trading while promoting a secular trend.

Papasmurf's picture

It's one thing to make money trading.  It's quite another to pump while you dump.

gaoptimize's picture

Yep, I have a joyous little DS boy who doesn't concern himself with the PM market at all while I back up the truck.

Silveramada's picture

bottom 18.50 silver and ~1200 gold on record 6-26-13...we may be out of the woods or another leg down, before shooting to the moon???

Herd Redirection Committee's picture

SLW is a heck of a buy here.  Not investment advice, DYODD