India Gold Demand Surges 450% and Bank of Russia Demand At 15 Year High

Wednesday, October 22, 2014
By Paul Martin

By: GoldCore
GoldSeek.com
Wednesday, 22 October 2014

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.

The Rest…HERE

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