India FinMin: "Demand For Gold Must Be Moderated"

Tyler Durden's picture

As we wondered out loud yesterday, many have questioned the disconnect between increasingly burgeoning central bank balance sheets and money printing and the range-bound trading in Gold. It seems the first real hint of why is peeking through as the Economic Times reports the Indian government are growing increasingly concerned at the rate of gold imports. As the India Finance minister stated: "Demand for gold must be moderated... We may be left with no choice but to make it more expensive to import gold. The matter is under government consideration." Gold imports are playing a major part in India's record high current-account deficit (at $20.2bn for the period April to September), down 30.3% YoY thanks to a doubling of the customs duty on standard gold bars (to 4%). It seems the Indian powers-that-be are learning from their US and European leaders that if something is happening in a free-market that threatens the status quo even modestly - crush it with regulation and centrally-planned control. As the article goes on to note, currently, the government is also making efforts to channelise investor money into equities and other financial instruments to reduce demand for the yellow metal.

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DosZap's picture

hey india try silver,the other gold!

They are loading the wagon with that also.

XtraBullish's picture

Short cash = long gold


Anasteus's picture

Short cash = buy physical

corrected it for you

Anasteus's picture

Gold and silver are the only 'goods' that have to be moderated... which explains all.

Thanks to the concerted efforts the governments guarantee PM’s stable growth at moderate pace without the risk of entering a bubble phase. What else can enjoy such a privilege?

yogibear's picture

Bernanke and the US Federal Reserve banksters keep printing until a currency crisis, then a new world currency. 

It's the plan.

tango's picture

No, that is not the "plan".  (Where do these ideas originate?)  They are simply acting out of habit, intertia being the biggest driver.   The FED knows how to print money and so it does - no dark mystery or conspiracy needed.  All central banks believe that printing money, increasing inflation, raising securities and prices will get them through until the next crisis when they will do variations on a theme.

GMadScientist's picture

Funny that Inida didn't conclude that they need to increase their exports to fix their current account deficit.

DoChenRollingBearing's picture

+ 1 for a good observation.

But who wants to buy anything BIG from India?  Not bearings...

debtor of last resort's picture

Fascism, fascism everywhere. So many fascists, so little rope.

DowTheorist's picture

It irks the Indian Government because Indians know how to tell the difference between paper gold and physical gold. If Indians were buying securitized (paper) gold, everything would be fine.

Westerners should be able to distinguish between the two kinds of gold. More about each kind of gold and the time frames where they belong:

Quinvarius's picture

Is this guy trying to scare everyone INTO gold all at the same time?

jonan's picture

been stackin since 08, but i have to say, i made more money on the pmags i've been stackin since 08 than gold and silver in matter, keep stackin AND packin...$12 pmags going for $30-$40 bucks...bulletz biotchez!!!

steve from virginia's picture


Stupid Bank of India!


India needs to end petroleum subsidies. These pressure the balance sheet far more than does gold imports.


Fuel subsidies amount to approximately 10% of Indian GDP.

MFLTucson's picture

 "Demand for gold must be moderated... We may be left with no choice but to make it more expensive to import gold

Just follow what this courrpt cardel does in America if you want prices to moderate.

AndrewJackson's picture

Just when I think I can't hate these central planning psychopaths any more than I allready do, they go and do something like this. Heaven forbid your citizens build true wealth that can't be corzined overnight.

kito's picture

They should be more concerned with keeping dysentery would better serve the country's interests.........

FubarNation's picture

You know I've been starting to question my PM purchases. 

Yes I made my yearly EOY purchase of physical but somehow I just didn't feel right about it this year.

Perhaps it is the preponderance of 'Reality' gold mining shows that are on the air - I'm not sure.  Just have this pit of uncertainty feellng in my stomach - never really had it before.


The only thing that keeps my faith is that most of the public still has not yet jumped on the PM bandwagon from what I can see.



tradewithdave's picture

That's the whole point.  The TV shows are about physical while the advertisements are about ETF's.  The sheeple don't know difference and the new system is going to be based on a fractional reserve of physical, but it will never be audited.  So, yes your sense is right... there's a problem creating scarcity when you can't audit or limit rehypothecation.  So, in terms of dollars, you don't control it and your sense is then you shouldn't buy it.  That would be accurate if gold is priced in dollars. 

When and if dollars are priced in gold, capital controls are implemented, buying and selling of gold is outlawed or constrained, then it will be too late.  The whole idea is to support paper gold as an idea until they don't need it anymore.  The question is do you have the same sense about silver that you feel about gold?  If silver equates to gold at a proportion between 50:1 and 16:1, then why don't central banks use silver and gold interchangably, especially if silver was part of the history of coin minting?  Is it because silver gets used and gold does not?

Quinvarius's picture

When they start turning a profit on those shows instead of losing their shirts, then maybe.

DosZap's picture

Yes I made my yearly EOY purchase of physical but somehow I just didn't feel right about it this year.

Perhaps it is the preponderance of 'Reality' gold mining shows that are on the air - I'm not sure. Just have this pit of uncertainty feellng in my stomach - never really had it before.

Why the neg feelings(seemingly), watching those makes me all the respectful of how damned expensive it is to get out of the ground, and the Printing presses are full tilt boogie WorldWide.

That should be enough to allay your fears.

DoChenRollingBearing's picture

EXCELLENT point DosZap!  I sometimes forget that gold "does not come from the coin shop", LOL.  Gold mining is expensive, capital intensive and risky (mines are at risk of being nationalized).

Money growth is much faster than gold production growth.  At some point, that reality will kick in...

Dr Benway's picture

My hesitation comes from seeing gold behave like a risk asset. Very unsettling. But I am comforted by seeing lots of Cash4Gold places and no buying bandwagon by the public.

MeelionDollerBogus's picture

Which asset is not a risk asset? How does that ‘asset’ behave?

Bastiat009's picture

The best way to moderate demand is to let the market work .. higher prices will moderate demand but it will also expose the Obama-led USA as a fraudster/terrorist country.

rufusbird's picture

I suggested on the 20th of December when Silver dropped below $30, that the sell off in Silver may have been tax motivated selling. Reprinted below. Looks like it recovered plus some already today.

"I suspect that if some were wanting to lock in some profits on gold and silver they would rather be doing it in December than in the new year. Tax motivated selling providing a buying opportunity?"


q99x2's picture

They put chips in their citizens and teach them poor English too. The NWO eugenicists are experimenting over there.

Marigold's picture

Send Blue Pill there to investigate !

Aztec Warrior's picture

I am a middle class Indian.

My family only owns about 10 - 15 ounces of Gold - $50k- which in india can sustain you for about 5 years on a strict budget for a faimly of 3-4.

Gold has been the only traditional hedge against devalued fiat currency. Sadly Uncle Bernanke and company are playing casino on Gold too (like all commodities) and true nature of Gold as a monetary unit is being hidden from people by casting gold as a mere commodity like oil and beans

Dr Benway's picture

10-15 ounces equal $50K? Are you writing from the future? Otherwise I have some bad news for you...

Aztec Warrior's picture

My bad - its $25k

Average Indian woman gets about 100 grams (3 troy ounces) at her wedding.

About the same is accumulated over your married life + same saved up for your kids

So 15 oz @$1700 per oz ->  25.5k





Dr Benway's picture

But doesn't 3+3+3=9 and not 15?



Bansters-in-my- feces's picture

Can't have your citizens buy commodities now can we.....

Commodities being illegal and all.


Ps....Fuck you's timmy and ben.

lemonobrien's picture

at least they're importing gold rather than cheap plastic from china.

Herdee's picture

"We didn't see it comin"

supermaxedout's picture

Basel III the game changer for gold

You can read there:

"The number of member jurisdictions that have published the final set of Basel III regulations effective from the start date of January 1, 2013 is 11. These includes  Australia, Canada, China, Hong Kong SAR, India, Japan, Mexico, Saudi Arabia, Singapore, South Africa and Switzerland," the committee said.

"Seven other jurisdictions — Argentina, Brazil, the European Union, Indonesia, Korea, Russia and the US — have issued draft regulations, and have indicated they are working towards issuing final versions as quickly as possible. Turkey will issue draft regulations early in 2013," it said.

Some major banks in Europe and the US have however said they would not be able to meet next month’s deadline (1.1.2013) for capital reforms but the Basel Committee has insisted this would not derail their implementation.

Stefan Ingves, chairman of the Basel Committee said last week: "While some jurisdictions have not been able to meet the planned start date, a large number will be ready to begin introducing the new capital requirements as planned on January 1 2013."


And this means already now gold is not anymore a commodity but M O N E Y. The Basel III rules (published by the BIS Bank of Intl. Settlement in Basel Switzerland)  which is setting the worldwide standard for the banking community have moved gold up in the value ladder by.1.1.2013. It does not matter that it is till now only effective in the first group of the jurisdictions.  The effect that gold is regarded in Australia, Canada, China, Hong Kong SAR, India, Japan, Mexico, Saudi Arabia, Singapore, South Africa and Switzerland as hard stable cash, which is the highest quality of capital, equal with US Dollars, Treasuries, German Bunds etc.  is breaking the damm.  Gold can now be purchased at will by the banks in these jurisdictions in order to diversify their capital holdings without the till 31.12.2012 obligatory 50% value discount to the market price.  The banks in these jurisdictions can now accumulate gold without their capital base being harmed.  The earlier they do it, the more their capital base can benefit from this move..

And these expected gains are absolute necessary to hold the balance sheets of the banks together, because at the same time the new Basel III rules say, that (dont laugh) Asset Backed Securities which were also regarded as first class capital (Tier I)  till 31.12.2012 have lost their status and can not anymore be regarded as capital at all.

Imagine at the same time Japanese Souvereign bonds would loose two notches  from AAA to AA- meaning the value of these bonds (under the present BIS capital rules) would automatically be reduced by 20% in the banks balance sheet. Its not unrealistic that this is going to happen within the next 12 months.  So the banks in Japan and all over the world need a lot of "gold windfall profit" to cover their ass from these losses. And  there is no other "safe haven asset" anymore which is having the potential to move upward. Dollars and treasuries are at best moving sidewards if not downwards.

So whats left.  not much. It seems to me that the time of the gold mania is "ante portas". Insofar I can understand the IndFinMin. If nothing happens then the new gold rush can destroy the  old fiat world within a matter of days.   But you know what, nothing can stop this thing in my opinion. Be it now or in the next 12 to 24 months. The financial world has to find a new equilibrium to function. Now everything is stuck and out of balance and in my opinion the things are going its way they have to go.


Herdee's picture

There's only one true way to beat the manipulation of prices in the gold and silver markets by governments and central banks.That method of stopping it is very simple.Strong physical demand of the commodity that holds long term.As the screw gets tightened the next step could very well be panic buying.Personally,one of the chief reasons I buy precious metals and take physical possession is because I hate corrupt politicians.As you know,we just rent them,until the next overpaid gang of crooks come into power to screw things up even worse than the last gang of thieves.

AgAu_man's picture

How many times do I have to tell you, boys & girls:

"It's ALL about preventing the CB fiat dominos from falling prematurely, i.e. pre-NWO-schedule. Till then they all have to circle the big money-drain together."

Until the BoE and the Fed are damn good and ready, the other CB members will just have to toe the line.

Q: When will that be?
A: When they are satisfied with their NWO land-grab in key parts of the world. This is WIP, in case you're not following those headlines.

End of story.

The REAL question for the non-deluded, the non-hopium people, is how you are preparing and executing the comprehensive plans for your family and community.
Chances are, you'll need both to survive and thrive.

Overflow-admin's picture

Well if it's only 4% to get your gold passed, you better pay because soon or later the usual pundits will ban imports or domestic sales.


Any questions?


Closer reference: Argentina, 2012 (sept 13th)

resurger's picture

And thats the plan all along, i read on bloomberg that the recovery is pushing the yellow metal price down.. what a fucking bullshit