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India Gold Demand Surges 450% and Bank of Russia Demand At 15 Year High
India Gold Demand Surges 450% and Bank of Russia Demand At 15 Year High
Demand for gold continues to be robust and has indeed increased significantly in recent weeks despite gold’s most recent paper driven gold weakness.
Demand in China and India surged again and gold reserve diversification by the central bank of Russia hit a new record high in September as geopolitical tensions rose.
The seemingly insatiable appetite of the growing Indian middle class for gold is causing the government in India to again consider imposing sanctions on the importing of gold.
Gold imports into India in September were worth $3.8 billion. This figure is almost double the $2 billion spent by Indians in August as, once again, the Indian middle class, like their Chinese counterparts, used the opportunity of a weakened gold price to increase their holdings. This was particularly the case in recent weeks and in the run up to the Diwali festival which began yesterday with Dhanteras.
To put this figure in context it is worth noting that in August 2013 gold imports were valued at just $739 million.
Indian gold imports were up 449.7% y/y in September, which is approximately 94 tonnes, using the average gold price for September.
From the point of view of the government in India, this level of demand for the precious metal, which must be imported, is an unwelcome development. "The trade deficit worsened to an 18-month high of $14 billion in September following a 450% rise in gold imports as importers rushed to take advantage of lower prices" reports India's Economic Times.
The government in India claims that this staggering level of demand is causing a weakening of the rupee which undermines India's ability to import the other commodities upon which it depends.
Exactly how the Indian government intend to deal with the problem is unclear. The previous attempt to control gold imports in 2013 was aborted due to it's deep unpopularity and to the fact that vast quantities continued to be smuggled into India regardless, resulting in loss of revenue to the state.
In China, gold imports have surged again.
In the world’s largest gold buyer China, premiums recovered to $2-$3 an ounce from $1-$2 overnight, showing higher demand and lending support to global prices. Shanghai Gold Exchange (SGE) gold withdrawals were very high this week and saw a huge rise for the week to 68.4 tonnes with most of the buying after their Golden Week holiday.
Last year alone, China imported almost 2,000 tonnes of gold as seen in the important metric that is withdrawals from the SGE. To put that figure in context, global mining supply will be around 2,700 tonnes this year.
What we in the West need to appreciate is that - in the case of both India and China, where around one third of the population of the Earth reside, - it is masses of individuals, families and local businesses who are driving this demand.
It is being driven particularly by the burgeoning middle classes who are accumulating whatever gold they can with their disposable income. The desire to own gold as savings and financial security is culturally embedded in these ancient cultures.
Asians experience of fiat, paper currencies has not been a good one.
As such, the demand is not speculative and a cyclical, short term blip. Rather, it would appear to be a long term, structural shift to higher demand. While the trend may dissipate it is very unlikely to reverse into a trend of mass selling and it is unlikely to reverse trend anytime soon given the fiscal and monetary challenges facing the Western and indeed the Eastern world.
Apart from massive store of wealth demand in the East, the gold reserve demand by many large, creditor nation central banks continues unabated.
In Russia, the central bank added a very large 37.3 tonnes of the metal to it's reserves in September - it's largest purchase in fifteen years.
It is an indication of the strategic importance that Vladimir Putin and his government place on gold that such a large amount was purchased at this time of international tensions.
The rouble has been under tremendous pressure due to Western imposed sanctions and the slump in oil prices - Russia's largest revenue source. According to the Russian Central Bank: "In the past ten days we have sold about $6 billion" to support the rouble rate, Reuters reported yesterday. And yet $1.5 billion was made available to acquire gold reserves.
Asian people are acting like their own central bank and diversifying their wealth.
It is safe to say that - in the event of a global monetary crisis brought on by a tsunami of insurmountable QE compounded debt - the average Indian or Chinese family will be reasonably well equipped to weather the financial and monetary storm.
The same cannot be said, unfortunately, for their Western counterparts where ownership of tangible assets is abysmally low and only a tiny fraction of the population own gold and silver bullion.
Get Breaking News and Updates on the Gold Market Here
GOLDCORE MARKET UPDATE
Today’s AM fix was USD 1,246.75, EUR 982.08 and GBP 777.66 per ounce.
Yesterday’s AM fix was USD 1,251.75, EUR 978.85 and GBP 774.17 per ounce.
Gold climbed $2.20 or 0.18% to $1,248.30 per ounce and silver rose $0.07 or 0.4% to $17.51 per ounce yesterday.
Silver in U.S. Dollars - 10 Years (Thomson Reuters)
Gold in Swiss storage or for immediate delivery lost 0.2% to $1,246.08 an ounce by 1200 in Zurich.
Silver for immediate delivery lost 0.7% to $17.43 an ounce. Platinum fell 0.5% to $1,276 an ounce. Palladium was 0.4% lower at $776 an ounce.
Gold retreated from the highest in almost six weeks in dollar terms due to profit taking and renewed risk appetite which saw stocks globally bounce from their recent lows although european shares are showing weakness again this morning. Although gold continues to eke out small gains in euro, pound and other fiat currency terms.
Gold reached $1,255.34 an ounce yesterday, the highest since September 10. Demand in India, the second biggest gold buyer, surged before the Diwali festival, Indian’s Christmas.
Diwali, the festival of lights is celebrated tomorrow and Dhanteras, the biggest gold buying festival, was celebrated yesterday. Dhanteras is considered an auspicious time to buy gold coins, bars and jewellery. Researcher CPM Group estimates the holiday generates about 20% of India’s annual purchases.
Platinum in U.S. Dollars - 10 Years (Thomson Reuters)
Gold has risen 3.2% so far in October as stocks fell sharply and traders pushed back estimates for when the Federal Reserve might raise U.S. interest rates from near 0%. The IMF has cut its economic growth outlook this month and Fed policy makers said slowing foreign economies were a risk to U.S. expansion. Indeed, the U.S. economy itself looks very vulnerable to a recession.
The Shanghai Gold Exchange is working to implement China's first forwards and options in gold, in a race to put China as the main Asian pricing benchmark that could rival the London gold fix.
The European Central Bank is planning to buy corporate bonds on the secondary market and may decide as soon as December with a view to begin purchases in early 2015. This is another sign of desperation on the part of central bankers who are attempting to kick start the structurally broken Eurozone economy.
A diversified portfolio of precious metal coins and bars, owned in a segregated and allocated manner in the safest jurisdictions in the world remains very prudent.
See Essential Guide to Storing Gold In Switzerland here.
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Steeped metals...it's what's for tea time.
The far more important question (from a former physical holder) is what metal do central banks hold? The answer is that they hold only gold. Silver's fate will rest upon it's industrial demand. Only gold will be repriced at some transition point.
You're so confused it's not even worth responding to. Let's just say, FALSE. next question ?
Silver historically has been a monetary metal for as long as gold and its industrial use is a recent thing. You ask Joe sixpack whether silver is money or not and he'll say "hell yeah!".
Joe sixpack hasn't a clue that there is a metal called silver. Silver to the average sheep is a colour, same as green, blue, bronze, gold, black and white. I wish that was sarcasm but it isn't.
https://www.youtube.com/watch?v=FSqA1dRgfbA
I once flipped a holed silver eagle at pool league...only one person knew what it was...and she made a grab for it.
and 90+% of Americans would rather spend their worthless fiat on drugs and/or alcohol, iDiot phones (which they borrowed the 600 dollars to get one from a high interest credit card), sit around and play on their iDiot phones, and see how far they can shove their empty heads up Kim Kardashian's big fat ass.
Most Americans don't even own 1 single ounce of silver. Most of my friends wouldn't either if I hadn't given them some for their birthdays and told them how important it is as well as not to go and trade the damn thing in for worthless cash.
I don't know why I waste my time and my silver, but I keep trying. I know they understand, but deep down they still really can't get past their normalcy bias.
Oh well...I've tried for years, so even though they piss me off I won't feel guilty after the shit hits the fan and everyone I know is wishing they would have listened to me and taken my advice when they had the chance.
Silver is still on sale, bitchez...keep stackin' it along with food, water, and other essential supplies.
SGR is currently 72.3!!! Damn that's insanely high. Those who have extra cheap gold in their stacks should definitely think about doing some gold/silver swaps at around 67:1 with premiums added. Not a bad score for a bunch of silver, especially if you have some older/cheaper gold in your stash.
Once that GSR (or SGR) starts to drop down into the 40's, 30's, 20's, etc. then swap that cheap silver back for gold.
Two assumptions on my part are one, that the GSR/SGR will drop back down into those ranges, which I believe they will eventually. Gotta be patient while the Crimex Cartel eventually goes tits up and defaults.
And two, that when we hit those ratios there will actually be any gold available that anyone wants to sell or trade. ***Get to know your local coin shop owner as well as you can. They're usually good folks and when you want to trade they will have the phyzz to do it with and will most likely work a deal with you.
When the GSR/SGR hit the low 30's back 2011 as silver spiked to 49 and gold hadn't made it's record move to 1900 quite yet was a great time for silver/gold swapping. Those who did it at that time will do very well right now gaining around 30 more ounces of silver now for that gold they may have swapped for back in 2011.
A great way to add to your stack by swapping true phyzz PM's outside of the paper game.
Well prepper back to your mountain cave now !
Demand for PMs from the third world is really nifty. Really, it is. But despite increased demand from the the third world the price of gold has crashed. Demand from the first world is needed or no cigar.
CRASHED / crashed ? are you sure about that ? Look this is a subject that requires study and research. markets don't go in straight lines; silver and gold didn't crash. they measure the value of the currency, not the other way around. try educate yourself, it can't hurt.
I'm fully educated. Gold went from 1800 to 1200. That is a crash.
See, I did the math.
we're experiencing an equal amount of physcial silver sales this year identical to last year's record sales. Demand in America is being scooped up by some deep pockets...it's not just us little guys buying 20 or 40 ounces every couple weeks or once a month. Hell, maybe it's Chinese operatives buying phyzz on the streets through the local shops or the online sellers. I don't know.
But the reason prices are down is not because of lack of demand either world-wide or in N. America. It's flat out, plain and simple, paper futures manipulation by the FED and JP Morgan.
Did you know that the FED and other primary banks get volume discounts on futures contract action from the Crimex when they make their moves in the middle of the night during off-hours and low volume??? Does anybody ask why the fuck would the Fed and other banks get volume fucking discounts for fucking around in precious metals futures contracts??? The people who print paper money out of thin air and the others who are given that paper money for free are using it while also getting fucking discounts for volume to fuck with the paper PM market.
Nope...no crime there....and people wonder why the paper prices get monkey hammered nearly every night at 3am and then again at 8am on the Globex???
It's the fucking crimes of the century right in everyone's face. But oh well...if everyone else wants to be dumb and broke all their lives, fine with me.
We few who know what's going on will just keep stacking as much phyzz as we can because that's that China, India, Russia, and the elite are doing. And all at these rock bottom, lowest undervalued prices in the history of precious metals.
It ain't gonna last for much longer though, so keep adding to your stacks now. I don't give a fuck if you have to quit drinking beer or smoking cigs or have to give up pizza or cut your cable bill or cell bill or stop going out to eat or have to eat fucking rice 5 days a week...do it! Use at least 50% of the rest of your discretionary budget to stack phyzz.
You'll be heavily rewarded in the not too distant future.
Anyone who wants to be a patriotic American should PURCHASE AND OWN at least one USA silver dollar. There are lots of coin dealers in the yellow pages, and the U.S. Mint also sells silver dollars, as the Constitution authorizes it to do. I don't have anything against Russians, Chinese, or Indians, but if they get ahold of all the silver and gold, then one way or another they may be able to put the USA in a tight spot. Right now the USA is still able to bomb its way out of any assault on the Fed Privately Owned Bank Funny Money "Dollar", but no empire has ever been able to do that for long; such endless war simply costs too much.
Obvious big crime is not obvious to honest people. They are so trusting...