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India’s Futile ‘War On Gold’ Ending - Demand To Rise
Today’s AM fix was USD 1,294.50, EUR 945.93 and GBP 767.02 per ounce.
Yesterday’s AM fix was USD 1,292.00, EUR 942.65 and GBP 764.81 per ounce.
Gold remains in lock down in an unusually tight range between $1,284/oz and $1,306/oz this week. Gold in Singapore again traded down to the $1,292/oz level prior to slight gains in London which led to gold over $1,295/oz and then a run to $1,304.oz prior to determined selling was seen again.
Gold in U.S. Dollars, Daily, January - May - (Thomson Reuters)
India Gold Demand To Rise As Central Bank Eases Tough Import Rules
India's central bank, the Reserve Bank of India (RBI), eased tough gold import rules late last night,by allowing seven more private agencies to ship and import gold bullion. Industry officials and gold analysts say the easing of restrictions will increase supplies, reduce premiums and lead to increased demand in the peak wedding season.
The move allows "star trading houses", private jewellery exporters which had been barred from importing gold since July 2013, to resume imports, with immediate effect. India raised the gold import duty last year to a large 10% from 4% and also mandated that 20% of imported gold be exported, known as the 80:20 rule.
There are no changes to the more stringent 80/20 rule as of yet, but sources have told Reuters that the Reserve Bank of India and finance ministry officials will recommend that the new government relax strict gold import rules to head off a surge in illegal buying and the continuing wave of gold smuggling into India.
The easing of the import rules is bullish for gold bullion and the gold sector. Shares of jewellery companies surged after the RBI allowed banks to provide gold loans to the sector.
The moves by the RBI, is likely to increase demand for gold. Curiously, gold prices saw little gains after the announcement.
Although the two steps alone are not expected to impact India's current account deficit, they could reinforce expectations that RBI and finance ministry officials will soon move towards removing some of those curbs.
HSBC commenting on India's move to allow more firms to import gold, said that "the announcement is a sign that the RBI is slowly starting to address the onerous restrictions put in place last year on the gold trade and may raise optimism for an eventual roll back of the bullion import taxes."
Russian Central Bank Gold Reserves, Millions of Troy Ounces - (Gold Charts R Us)
Russia’s significant 900,000 ounce or 28 tonne gold purchase worth over $1 billion in April continues to be digested by the market. Ordinarily we have seen gold react positively to surprise large central bank purchases. Another bullish development has not led to rising gold prices. Gold prices appear tethered to the $1,300/oz level.
RUSSIA CHINA HISTORIC GAS DEAL
Another important geopolitical development yesterday was China and Russia signing a $400 billion gas supply deal involving payments in the yuan and ruble.
The deal secures the world's top energy user a major source of cleaner fuel. It opens up a new market for Russia as it gives itself options and the ability to cut off dependent European countries should the Ukraine crisis escalate and further sanctions be imposed on Russia.
The deal is important from a monetary perspective as Russia and China are planning to increase the volume of direct payments in mutual trade in their national currencies, according to a joint statement.
Chinese President Xi Jinping with Russian President Vladimir Putin after deal
It has significant ramifications for the dollar as global reserve currency. The era of the dollar as the sole global reserve currency is gradually coming to a close - see Currency Wars: Bye, Bye Petrodollar - Buy, Buy Gold. We will explore the Russian Chinese deal and its important geopolitical ramifications in more detail tomorrow.
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Good thing gold never moves abberantly up or down on holidays.
... oh wait... http://goldprice.org/charts/gold_3d_b_o_USD.png
Quintus
You're 100% right in what you say but I still think the end for the fixers is not as near as some think. I'd put it more in the 1-3 year range. Happy to be wrong though!
Whatever the case, I'm a buyer every month, high prices or low prices, I'm a buyer...
The home state of Gujarat from where Narendra Modi has a lot of jewellry traders/manufacturers/artisans who probably relied on the legal channels of supply. Not surprised if they are lobbying heavily with their home grown leader to relax the import restrictions. I am sure their business must have been hurting big time but might get some relief now.
A Multi Polar World Has Arrived
http://winteractionables.com/?p=11928
It is abundantly clear that 'Someone' has decided that the price of gold shall be no more than $1,300 and silver $20. As we all know, price fixing by central authorities always works out well. Just ask the Venezualans.
I guess one could interpret this most blatant new price capping phase as a sign of strength on the part of those doing the capping, but it seems to me that it is more likely a sign of desperation. They can't fix the price lower, because then the miners will all go broke and supply will dry up, but they are terrified of seeing it go higher so every break above the price caps is met instantly with a blizzard of paper selling. So here we are - stuck in a holding pattern while, presumably, the price fixers wait in increasing desperation for something, anything, to occur which will slow down the huge Asian demand for physical metal.
What will the manipulators do if, or rather when, it becomes clear that the Asians have no intention of halting their purchases? I believe they will see this through to the bitter end, using the paper gold market as a tool to fix prices until the market itself loses all credibility and is broken.
After years of false hope, I truly believe we are now very close to that point. This blatant and completely undisguised price capping is the end game.
I don't know. These bankers want to make money. When it becomes profitable to run the price, they will publicly crucify the bad actors. The banks who were stupid enough to go along with the scam and sell customer gold will be made examples of. The manipulators who ignore the warning shots will see prison time. They will clean the market up to make sure nothing gets in the way of the rally. No one will be able to do anything but go along with it. They rig it both ways.
Good analysis and according to Bloomberg there is only 20 years of gold left to be mined if mining continues at its present rate. Because of the manipulation and fixing gold and silver are hands down the best retirement plan out there as long as you don't need to exchange them for goods and services in the near future.
Gold and Silver Prices Only Go Down. GASPOGD.
China drops dollar in transactions with Afghan banks. Trial run?
http://www.reuters.com/article/2014/05/22/afghanistan-banking-idUSL3N0O8...
I see a new Wall Street book being released soon.
" How I went down with the dollar. "
By Eileen Dover and Pape R. Burns.
Higher taxes making no sense if gold is smuggled into India and taxman is getting zero slice of the cake.
R u Stacking or are you crapping?
Gold demand to rise? Great news, let's wait for the price to drop to $1200 , that's how markets work..
Gold to zero!
How many quatloos for your useless gold?
Silly Rabbits, Gold is backed by nothing! :)
"rupiah to zero" is more like it.
i'll hold this treasury position for a little while longer...but at some point there will be a "price print" that will truly terrify an impressively complacent marketplace.
lest people forget in 73-75 "inflation didn't prevent a 40% correction in equities."