India Aims to Restrict Gold Imports As China Breaks New Records
Wednesday, 8 May 2013
Gold rose $17.90 or 1.22% yesterday to $1,452.00/oz and silver finished down 0.29%.
The Reserve Bank of India issued a set of guidelines last week increasing restrictions on gold imports. According to UBS precious metals research they targeted the following areas:
1. To decrease gold imports, they aim to restrict local banks gold consignments.
2. Implement a restriction on using gold coins as collateral, limited to coins that are 50g.
3. Rules regarding non-bank lending against gold collateral will be set, covering regulations on ‘loan-to-value ratio, branch expansion, and review of Fair Practices Code provisions with regard to auction and transparency in loan terms.’
Silver, commonly known as, the poor man’s gold, is seeing a reverse trend in India compared to the world market where a drop in silver prices has increased demand.
In India, the demand for silver jewellery has fallen significantly and the investment demand has run dry even though the price has fallen to Rs 46,000 per kg. This looks to decrease the country’s silver imports by 12% to 2,200 tonne this year from 2,500 tonne last year.