India's Continued War on Gold Causes a Monstrous Increase in Silver Imports

Sprott Money's picture

 

India's Continued War on Gold Causes a Monstrous Increase in Silver Imports

Written by Nathan McDonald, Sprott Money News

 

India's Continued War on Gold Causes a Montrous Increase in Silver Imports - Nathan McDonald

 

For anyone that has followed my writing for some period of time, you will remember the series that I wrote, which broke down India's war on gold and how it was going to fail in its goal - and fail spectacularly it did.

 

 

This series went on and through time, my initial estimations were proven correct - the officially reported number of gold imports did indeed crash, but this was simply because the black market exploded. Smuggling of gold into India increased dramatically and all kinds of innovative ways of getting the metal into the country at reduced costs were created. The free market exerted its will and as always, won the day.

 

 

Undoubtedly, there was some reduction in imports, but not as much as the government of India was hoping for. Yet, there was one other prediction that was made during this time period, of which has also been proven correct through time. The demand for silver was going to explode.

 

 

India in the past has had a history of being the largest importer of the yellow metal, which it has only recently been dethroned from. Their appetite for gold is insatiable and therefore it was only logical to assume that a large percentage of the funds intended to flow into gold, were going to go to the next best thing: silver.

 

 

This has and continues to prove to be the case. As reported, imports of silver in September exploded higher, increasing by a whopping 152% year over year! This is coming on the back of an already significant surge seen in the month of August.

 

 

566.778 tons of silver were imported throughout the month of September, up from 225 tons in September 2016. This is a massive and huge increase, indicating that India's appetite for precious metals not only remains strong, but is increasing, despite the government's best efforts to clamp down on it. In fact, this was the highest level seen since 2009.

 

Meanwhile, in the West, precious metals continue to be scorned and ridiculed, cast aside and forgotten as the latest and greatest thing continues to siphon funds out of this market. Cryptocurrencies, led by Bitcoin, continue to drain funds that would otherwise have gone into the precious metals space.

 

This is not entirely a bad thing, unless you are fully committed to the precious metals space. As many of you know, I have been a long time supporter of Bitcoin, writing about its value from its infancy. But, still, as I have always stated, it is no replacement for gold and silver, which have stood the test of time for over 10,000 years and will continue to do so for the foreseeable future. They are two different assets and
play two different roles in the protection of your portfolio.

 

I expect 2018 to be the year of gold and silver's resurgence after the monumental explosion seen throughout this year in the price of Bitcoin. This will be a price increase that has made many feel like they have "missed the boat", which will cause them to search for other opportunities.

 

I expect the West to once again wake from its slumber and take cues from countries such as Russia, China and India, who continue to take prudent steps and diversify into hard assets.

 

Questions or comments about this article? Leave your thoughts HERE.

 

 

 

 

India's Continued War on Gold Causes a Monstrous Increase in Silver Imports

Written by Nathan McDonald, Sprott Money News

 

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Pearson365's picture

The 1980 price of gold reached $850.  Adjusted for inflation that price is equivalent to a current price of over $14,000.  Why shouldn't it reach $14,000?  Is it different this time?

Thethingreenline's picture

The brilliant Andy Hoffman has sold ALL of his silver and only owns bitcoin and gold.
Let THAT sink in for a bit!

TTGL

silverer's picture

Keep up the good work, India. The COMEX criminals are losing sleep.

Silver Savior's picture

Bitcoin is a distraction .The elite want people to get into quirky stuff like this so they can secretly pull the rug out from under you. Why do you think Bitcoin came out right after the 2007/08 recession? 

Meanwhile the East is importing real monetary wealth for the great reset. If you think bitcoins price moves are impressive just wait for this precious metal revaluation against the fiat. I was trading Bitcoin for awhile but I feel something very wrong with the whole idea.

silverer's picture

I agree. Bitcoin is a better place for the excess cash to flow than people buying PM's and taking physical delivery. It costs nothing to create a digital drain which won't hurt the dollar, at least in the short run. The value of the dollar is not tied to Bitcoin, but it sure is to real assets like real estate, all commodities and especially PM's.

Bemused Observer's picture

Bitcoin is a 'beard'...it stands where gold traditionally has and tries to function as gold. The people putting their money into it would be aggressively stacking PM's in an earlier time. It isn't the medium that is important here, it is the message.

One must ask why these people are seeking a replacement for their currencies. They only do that when there is a major problem with those currencies, when they are afraid of value-loss by staying in those currencies. What is important is not that they run TO bitcoin, but that they run FROM the dollar, the Euro, the Ruble, the Yuan...

Generally, when you see big moves in society, it is because people are running AWAY from something, not towards something. In America, we have been running from our dollar for at least 40 years now, that's what all this fancy and exotic finance has been about, and the digitalization of our money. But they are out of tricks now, and so we will see people start fleeing to alternate forms of wealth-storage, including bitcoin. TPTB have known this was happening, hence their strict controls over the price of PM's-the traditional destination of currency-avoiders. Now that bitcoin is on the map, so to speak, they will turn attention to it as well. Anything that begins to function as a destination for currency avoidance will get 'the treatment'.

I am what you'd call a gold-bug, but even I understand that people don't run to gold because it is so superior to currency...they run FROM the currency because it sucks so badly. If your gold suddenly gains a whole lot of value, it is because your economy is crap, and that is nothing to celebrate. That gold hasn't made you rich, it simply increased your odds of not starving to death or ending up homeless...

Works for me, but then I'm a realist. Too many PM stackers are apparently thinking they will net some kind of windfall when prices spike, and aren't thinking about the fact that this would signal something profoundly WRONG with the economy, something that would make it unlikely they could ever cash in on that windfall. For instance, if gold tripled in value, that would mean some serious inflation in the economy, so everything else would be going way up as well. Sure, you'd be able to sell your gold, but it wouldn't buy you much more than it did before, so much for THAT. A very, very lucky few may be able to thread the needle, and cash in at JUST the right time to gain an advantage, but that almost certainly will not be YOU, and by the time you hear about the move, it will be over.

silverer's picture

"...aren't thinking about the fact that this would signal something profoundly WRONG with the economy..."

Well, I certainly have thought of that. I tell my friends, "Gold and silver is a good place to be, but you won't like the reasons for the price really taking off."

Food Loaf Junkie's picture

+1000 on Modi, Forced capitulations of PM's come from buying on margin.  As to the old world order, I agree they still maintain control, but only as long they can provide bread and circuses to the masses.  As to when that will end, I cannot say but it will, as all things do.  Then things will become "Interesting"

:-)

datapanik's picture

Modi is a traitor and for his reward the credit rating agencies have indulged him.

PMs so heavily managed its not worth discussing, forced capitulations as ride gets rough.

Old World Order launching all out assault against humanity - Full Spectrum Dominance psychosis.

BobEore's picture

Thanx - for bringing the thread back round to something remotely resembling the topic of the post...

which appears to be.... Indian demand for precious metals... interspersed with the apparently now obligatory self-congratulatory echo-chamber pats on back which writers upon this subject indulge themselves in uniformly.

Q. If India is pulling in a lot of silver, instead of the state-discouraged gold metal...
where's the bump in price which these same authors NEVER TIRE OF PRESUPPOSING is a consequence of one country or anothers' temporary infatuation with shiny stuff? ??
A. There isn't any - of course! That's because... the logical fallacy constantly employed - year after year - by the same serial loser prognosticators... that DEMAND = PRESSURE ON PRICE...

IS NOT WORKING... anymore/and NEVER DID - as it applies/
to the metals.

Q. How is it that the same guys who routinely shout 'manipulated metal markets' at the top of their lungs... as the explanation for doldrums and deep sixed prices...

put together silly prognostications which assume the simple equation as stated above... could possible work when all bets are off because of heavily manipulated metal markets??

A. Don't even ask. It's just how we roll... in GOLDBURG!

OH! jUSt in cAsE anybody was actually interested in the subject of precious metals/India/and conspiracies to limited demand....

https://storify.com/SuaveBel/big-gold-s-media-minions-activate-the-turki...

https://storify.com/SuaveBel/puppet-banks-puppet-press-puppet-governments

I covered the topic in detail, three years back... before realizing that the last thing goldbugs wanna talk about when jawboning together ...

is gold/markets/and manipulations!

Bemused Observer's picture

The reason you haven't seen a bump in price is because there are still many, many alternatives to PM's out there, like the many digital currencies. And fancy financial engineering is still going strong. In the presence of so many alternatives, the demand is too diluted for pricing pressure on any one.

But those alternatives are not market-tested, and when TSHTF they will begin to fall, and fall fast. The first few big failures will make headlines, and trigger the fall of the rest.

THAT is when you'll get your price spike in PM's. AND in everything else, so if you HAVE PM's you'll be able to tread water while others go under. But you'll still have to swim to dry land, don't forget that, and for that you will need more than gold and silver.

The people who complain about the non-performance of PM's are almost always people who bought anticipating a major run-up and cash-out, leaving them with huge profits in hand. It hasn't happened, and now they, like the fox and the sour grapes, says that PM's are crap and they wouldn't want them anyway...

And it won't happen, because that's not how PM's help you through a financial crisis. They don't make you rich, won't give you power. You aren't going to emerge from crisis with your bag of double eagles and become the new royalty. At best, you may emerge relatively unscathed, if a few pounds lighter, with enough resources to be able to get together with neighbors and restore order, unlike many who will have starved or been forced to move. 

PM's are the gold coin you give to Charon to ferry you across the Styx...what happens after you land on the other side is up to you. All your gold buys you is a seat on that ferry, that's it.

BobEore's picture

Hey - \xtremely rare, thought-out response guy!/

another THANX ... is due to you... for actually cutting against the grain in GOLDBURG(and its' silver slumtown), and making an argument!

Let's peek under the hood!

Sidestepping the distraction of "non-performance of PM's"... because that is neither the meaning of or the issue behind my comment re "bumps"...

we can move right into what is: the use of failed methodologies to measure demand/price points/market action of precious metals. Which is a phenomena so widespread among those who pontificate pon the subject, as to be 'the norm.' I'll refer to "Mish" Shedlock for the most pithy summation of the resulting clown show;

"Most analysts are totally clueless about gold and gold markets. They cite jewelry, mining production, central bank sales, and all sorts of other irrelevant factors in their analysis."

Such as is on display in the present posting, only amplified, because the author is one of the simpleton cheerleader types who paints by numbers... numbers which have no relevance to the question of 'bumps' in metal prices.

And while I'm happy for you to review the alleged "true" meaning and purpose of holding gold... as well as the "false" ones...

I fear your intentions are misapplied in the present case>

not only do I decline to pay the ferryman for a one way trip across a river the other side of which... involves most definitely NOTHING being :up to oneself"(unless you have yourself been to HADES and come back to tell us about the adventure, tis generally ascribed to be a 'place of shades'... NOT human action!)as a use of my gold...

the 'seat' I've used that gold to gain me is one of my own crafting - and I've used it to RIDE... not swim to 'dry land' and back agin, for some years now... being

instead of the usual poseur on these pages... pathetically pontificating bout 'gold is money' and other slogans of the usual substitute for real action...

someone who uses the metal as their sole financial transactor... rather than a platform from which to hector the world outside of the cult of "my precious" as to how to be smart like them!

Anyhoo - kudos to you... for comin out and makin a case instead of the usual scurrying behind the walls/slapping the silly vote meter with one's furry tail!

Precious Hawk's picture

How many people in this world have $8,000 and if it was you, would you buy one bitcoin with your savings?

Half of America has no savings and survives week to week.

A bracelete of Gold or Silver is the only genuine option for surviving the reset.

PH

Bemused Observer's picture

Wearing your gold is always smart. It can be hidden under clothing so as not to draw attention. But someone wearing a nice gold necklace, a few bracelets, etc, can be airdropped into virtually any country on the planet, find a buyer for those items within an hour, and be functioning with local currency by dinnertime, while their card-carrying, digitalized friend is still trying to find a reliable wifi connection and arguing with a hotel clerk. 

jmack's picture

you can buy .0000001 bitcoin.  you set your computer to mine etherum and get paid in bitcoin, but you will pay for it in electricity, still a way to convert watts into bitcoin. You can lease mining rigs from outfits such as genisis mining for $600 to $3000 and be part of a mining pool.

 

   so your question is pretty ignorant.

Silver Savior's picture

I thought the question was pretty smart. If I wanted to invest in Bitcoin for real why would I want to fart around with a fraction of a Bitcoin and maybe make peanuts if I am lucky if I don't lose it all first? 

Gold or silver are superior alternatives. Ask around. People think Bitcoin is goofy.

wanderer9641's picture

If you are using electric heat in winter, mining becomes more economical as waste heat is not waste anymore

pitz's picture

Or you could use that electricity to drive a heat pump and save a lot more.  

afronaut's picture

Too complicated. PMs are simple. 

Miss Informed's picture

You consider that a strategy for wealth preservation?