The Gold Rush In India Begins: Expect A Big Move In The Price Of Gold

The proof is always in the results.  Here’s a story from Mumbai that is excerpted from Mineweb.com:

“The RBI decision is set to increase the supply of gold and bring down prices considerably, say traders. “The move will increase monthly average gold import from 25-30 tonnes to 50-60 tonnes. Most jewellers’ cost of funds could also decline with the resumption of gold loan facilities,” said Manish Kedia, bullion trader.

Mohit Kamboj, president of the Indian Bullion and Jewellers Association said, “Gold will now become available to jewellers with the move. Retailers can also start getting gold on loan at 4% to 5% interest, against the existing condition of making full payments for the gold bought. This will help save huge interest cost for most jewellers.”

Coincidentally, I sent an article on this topic to Seeking Alpha late last night.  I discussed the issue of the observed ex-duty market premiums to world spot gold that get paid in India.  The recent big decline in the ex-duty premium fell again last night from the night before from $90.54 (p.m.) to $51.35 (data from John Brimelow’s subscription report Gold Jottings).  This is a clear signal that the market is expecting much more extensive removal of the gold import controls installed last year.

You can ready Seeking Alpha article here see the detailed explanation:   The Gold Rush In India Begins.

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4 thoughts on “The Gold Rush In India Begins: Expect A Big Move In The Price Of Gold

  1. Kaplan Offers Golden Touch To Clients

    A prominent gold bug plans to take advantage of the recent slide in the precious metal’s price with his first fund for outside investors.

    Electrum Group’s Thomas Kaplan plans a $500 million private-equity style fund to invest in gold and other precious metals, The Wall Street Journal reports. While Kaplan has suffered massive losses on paper, he still believes that gold is a strong long-term bet—even more so after the rout it has suffered in recent years.

    Currently, Kaplan only invests his own fortune and that of his family, and for several high-profile institutional investors, including sovereign wealth funds from Abu Dhabi and Kuwait.

    http://www.finalternatives.com/node/27114

    Thomas Kaplan

    http://en.wikipedia.org/wiki/Thomas_Kaplan

  2. This is how the white fiver collapsed in the souks of Afghanistan. The suspension of the white fiver ended the whole supremacy of the sterling region destabilized the empire and led to its eventual demise. I can’t remember exactly but I recall the period was about 18 months start to finish.

    Zero Hedge comment -The de-dollarization escalates. As Reuters reports, Chinese banks have halted dollar transactions with most Afghan commercial banks. Whether this is related to the terrorist operations in the muslim-dominated Uighur region is unclear… also unclear is whether the Chinese banks will accept transactions with Afghan banks in CNY?

    1. Zerohedge really miss the point in this comment. Afghanistan does have a banking system but it is really a cash trade based system. The main export is opium 90% and the currency of export is the US $100 bill to fund imports from China. Refusing to accept USD $’s from Afghan banks doesn’t mean the same thing as refusing to accept USD $’s in the euroclear system, in Afghanistan it means refusing to accept 100 US $ treasury notes. It is not the de-dollarization of Afghanistan that is the issue here it is the de-dollarization of the drug trade.

      The over-hang of 100 USD $ treasury notes which is the currency of the drug trade will now be leaving Afghanistan and heading for Bahrain and Dubai. The drug dealers notes many of which will be “forgeries” from Iran. Remember the printing presses given by the US Treasury to support the Iranian loans under the Shah which have been used to fund Iran when the US stole their bank accounts.

      These dollars will be refused and doubt will be cast on all USD $ Treasury bills around the world which are the center of the white slave trade, the arms dealing and drug businesses throughout the world. This is exactly what happened to the white fiver when the British refused to honor the German fakes printed in the Second World War.

      This press release has nothing to do with Afghanistan and everything to do with China.

  3. Diamond Miners in Zimbabwe Told to Sell Gems to Central Bank as Collateralize for Chinese Loans

    n the article below from Bloomberg, we learn that diamond miners in the country have been told they must sell their gems through the Central Bank to serve as collateral for government loans. The country’s deputy mines had said in earlier in may that “Zimbabwe may use mineral exports, including gold and diamonds, to underwrite loans from China.”

    From Bloomberg:

    Diamond miners in Zimbabwe have been told to sell their gems through the central bank, which will use the stones to secure a government loan, according to a letter written to them by the country’s mines secretary.

    In the letter to miners, the secretary Francis Gudyanga, instructs that producers “prepare parcels of all your currently produced diamonds which must be sorted and evaluated with the involvement of the Minerals Marketing Corp. of Zimbabwe,” a state company, and payment will be made soon after.

    The stones will be kept by the central bank and used to “securitize a government loan,”

    http://wp.me/p2NEyt-3v7

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