I have the opportunity to track what’s occurring in the Indian gold market via John Brimelow’s “Gold Jottings” subscription report. He arduously compiles price and import data from various non-US and non-US influenced (e.g. the World Gold Council) data sources. This includes articles published by Reuters that somehow never get distributed in the U.S.
It was suggested in February by an Indian official that India was on track to import at least 150 tonnes of gold in March. It looks like that projection could play out:
March has not even ended, though preliminary data indicates India has already imported over 130 tonnes of gold this month. A conservative estimate suggests total gross import can reach 150 tonnes of gold this month (Koos Jansen).
Please keep in mind that this number does not include smuggled gold. The amount of gold smuggled into India has exploded ever since the former Government regime implemented strict gold import controls in the summer of 2013 in an attempt to reduce India’s massive balance of payments deficits.
The new Government has slowly removed the controls and gold importing has “normalized” to an extent, but gold is still being smuggled into India in order to avoid import duties and other market contraints. Let’s assume in all likelihood a total, including smuggled gold, of 200 tonnes of gold will be imported into India in March. This is approximately 8% of the total amount of gold produced by mines globally in a year.
At some point the U.S./UK is going to run out of vaulted gold that can be delivered into India and China. I would suggest that this day grows closer and that’s one of the reasons the U.S. is escalating the conflict in Ukraine with Russia.