India’s Hidden Demand For Gold

Western anti-gold propagandists have been scratching their head over the surprising strength in the gold market despite aggressive Central Bank efforts to push the price lower. Here’s a perfect example of the idiotic articles hitting the internet – this one from Investing.com:  Bring Out The Bears:  Gold Is Headed Lower.  This author refers to gold as “the shiny rock.”

Anyone who’s traded gold for a reasonable length of time knows that simple T/A applications are utterly useless.  This author’s work is T/A scatology.  I see he operates something called “Dragonfly Capital.” Dear god I hope he’s not responsible for managing other people’s money…

The recent strength in gold is widely being attributed to vigorous “western” demand. Other than the fictitious run-up in GLD’s reported vault holdings, and the record Q1 2016 quarterly demand for U.S. minted gold eagles, it’s hard to see whether or not the west is buying up a lot of physical gold or not.

However it’s been assumed that since early March that India was dormant for several reasons, not the least of which is a general jeweler’s strike over the excise tax implemented on jewelry sales.  However these jewelers still have to make a living.

John Brimelow – JB’s Gold Jottings report – featured an article from India which reports that “unofficial” imports of gold into India – aka “smuggled gold” – are estimated to be around 2.5 tonnes per week.  Based on the numerous other reports published by JBGT, estimates of smuggled gold into India tend to understate the true amount of smuggling.  One of the the benefits to jewelers to using smuggled metal is that they avoid paying import duties and the associated premiums over the spot price, and thereby offset the excise tax.

With the dramatic run-up in paper derivative forms of gold relative to the amount of physical gold available to deliver into those paper claims, it would be a grave mistake for the bullion banks to underestimate the amount of physical gold disappearing into private hands.

7 thoughts on “India’s Hidden Demand For Gold

  1. Some Americans are acquiring gold, but most are clueless. I asked my boss a while back if she had given thought to acquiring some gold. Without any hesitation at all, she told me she had never even considered the idea. It would not cross her mind. Her response was like she had anti-gold armor on.

    When the dust settles from the currency wars, those holding physical gold and silver will be happy they had the foresight to get some. The rest will wish they had been more open minded to the idea. They may find themselves trying to exchange their worthless, inflated TP currency for real money, but they won’t find any sellers.

    1. Isn’t this the same guy who not too long ago was saying gold was going to regress down to the mean – about $1150 as I recall – a mathematical certainty he said. What he forgot was the regression mean depends on the time period. A time period going back to the start of the gold bull in 2001, would have gold regressing back to $1600 on the long term trend line. So far so good.

      Nonetheless, I do agree that silver is going to breakout big time.

      1. Yes … Gary was a little conservative there for a while …. but back in Dec 2015/Jan 2016; Gary was pounding the table for a bottom in Gold … and anyone who loaded up on the Senior Golds like KGC, AUY, CDE, ect at that time (they were mostly trading around a $1.50) made small fortunes in a matter of 3 months.

  2. Silver needs to hold its line in the sand & close above its yesterday’s closing price!!! If it can manage this, that could be a MASSIVE blow to the cartel for a number of reasons:

    Today is end of the month, end of the quarter, and end of 1st half of the year.

    Knowing how lopsided & corrupt paper silver has been on COMEX, if silver can manage back-to-back high closes for 2 days in a row @ such a highly significant benchmark date, it could signal the defeat of the paper cartel! One can pray, can they not?

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