Gold and What Moves it.
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Gold and What Moves it.
Tracking all things that relate to and affect the price of gold.
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India mulling further efforts to curb gold imports - GOLD NEWS - Mineweb.com Mineweb

India mulling further efforts to curb gold imports - GOLD NEWS - Mineweb.com Mineweb | Gold and What Moves it. | Scoop.it

by Shivom Seth:


MUMBAI (MINEWEB) - 

The rumblings are getting louder by the day. The Indian government is considering more steps to curb gold imports and is looking to put a cap on the purchases of the precious metal to contain the country's swelling current account deficit.

 

The world's biggest gold importer has been trying to get its population to buy less of the metal and help bring down the country's import bill.

 

Late January, the government hiked the import duty on gold and platinum to 6% from 4% to curb imports of the precious metal. However, realising that an import duty hike was in the offing, bullion retailers purchased 23% more gold in January this year, ahead of the duty hike. ...

Hal's insight:

Click through for the rest. But what's clear to me is the attempt to manipulate and get gold out of the hands of people continues in India.

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Duty hike boosts Gold smuggling in India

Duty hike boosts Gold smuggling in India | Gold and What Moves it. | Scoop.it
Despite India's best efforts to curb illegal gold imports, which included a boost to the nation's customs in 2012, gold smuggling has been rather rampant.

 

MUMBAI(BullionStreet): Cases of smuggled gold entering India are coming in thick and fast. Almost as fast as gold coins and jewellery pieces are flying off retail shelves.

-- A brother-sister duo who arrived in Hyderabad by an Emirates flight from Dubai, were arrested for trying to smuggle in 8kgs of gold ornaments.

-- Mumbai airport custom officials arrested a Somali national with a Dutch passport, for attempting to smuggle in 5kgs of gold. -- Eighteen kgs of gold were confiscated in Hyderabad and Chennai at their respective airports.

-- Seven people including three Sri Lankans were arrested by Indian Customs officials at the Chennai airport trying to smuggle ...

Hal's insight:

LOL I'm shocked. Shocked, I say.

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India banks may be allowed to hedge risks on bulk Gold purchase

The RBI panel is of the opinion that buyback of coins might help recycle the domestically available gold which is estimated at 18,000-20,000 tonnes

 

NEW DELHI(BullionStreet): Indian central bank's recommendations to allow people to sell gold coins to banks is a right step towards cutting gold imports, analysts said.

 

The move will allow people to approach a responsible buyer rather than going to any private dealer and also enable them to get maximum prices for their gold.

 

Further, the group said banks could be allowed to use the futures markets to hedge risks in bulk gold purchases.

 

Banks can also benefit as the move helped them to better manage the cost-structures and will also help them to improve revenue by reselling the coins.

 

A panel constituted by the Reserve Bank of India to suggest measures to manage gold demand recommended that banks be allowed to buy back gold coins, which is not permitted now. ...

Hal's insight:

Hmm.. Anyone thinking this is a way for the gov to encourage people to get gold out of their hands?

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Smuggling accounts for 25% of India Gold inflow

About 25 percent of gold flowing into India is coming through irregular channels and further tightening of norms would increase that sharply.

 

NEW DELHI(BullionStreet): India's recent tough stands against gold could only increase smuggling in the world's largest consumer, analysts said.

 

According to India's Directorate of Revenue Intelligence (DRI), an agency that monitors economic offences, the incidence of gold smuggling in the current fiscal year has zoomed at least eight times compared with the corresponding period the previous year.

 

They added that the increase in import duty on gold has clearly led to a price differential between Indian and international gold, and that, in turn, has led to an increase in smuggling. ...

Hal's insight:

Wow. I have to admit, that's higher than I would have guessed.

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Gold imports soar in India as wedding season approaches

Gold imports soar in India as wedding season approaches | Gold and What Moves it. | Scoop.it

by Shivom Seth:


MUMBAI (MINEWEB) - 

 

Bullion traders across the country are one step ahead of the Indian government. Even as the government was pondering a proposal to hike customs duty on the import of gold this month, gold imports soared by 15% to 75 tonnes in January.

 

Though the government did go ahead and ultimately raise duties by 50% from 4% to 6% on January 21, bullion traders cornered most of the precious metal in the first three weeks of the month in anticipation of the hike in customs duty.

 

India's gold imports climbed to $56 billion from $21 billion between 2009 and 2012, despite an 81% price hike in domestic prices. The country's Finance Minister has also indicated that the government is considering stringent measures to curb gold imports. ...

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India And Vietnam Are Trying To Get Their People Off Gold

India And Vietnam Are Trying To Get Their People Off Gold | Gold and What Moves it. | Scoop.it

by Ashley Kindergan, The Financialist

 

When uncertainty reigns, investors all over the world turn to gold as a safe haven.

 

But some countries are starting to take issue with their residents’ preference for storing wealth in gold bars, rather than bank accounts.

 

Large gold imports can throw off a country’s current account balance – the difference between what a country earns and what it spends on foreign trade.

 

Widespread investments in physical gold also mean that large pots of wealth sit idle, instead of being put to work in the broader economy.

 

And in countries where gold is a popular investment, those financial institutions which carry large gold deposits, lend cash against gold or offer interest-bearing gold deposit accounts, can pose a risk to the financial system if commodity prices suddenly shift.



Read more: http://www.thefinancialist.com/india-and-vietnam-taking-the-glitter-out-of-gold/#ixzz2IvMjvuH9

Hal's insight:

Interesting read.  hat tip to http://www.caseyresearch.com/gsd/edition/forget-germany-its-turkeys-central-bank-we-should-be-watching

 

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India may rise Gold duty to 6% as imports surge again

Analysts attributed the sudden rise in gold imports to brisk buying by traders as they rushed to place orders ahead of an expected rise in the import tax.

 

NEW DELHI(BullionStreet): Indian government's efforts to control gold imports and the overall hunger for gold by majority of it's population suffered a setback as imports surged on the first week of this year.

 

Traders have imported between 25-30 metric tons in the past one week compared to five to seven metric tons in the previous few weeks, said Prithviraj Kothari, managing director of Ridhi Sidhi Bullion Ltd.

 

Analysts attributed the sudden rise in gold imports to brisk buying by traders as they rushed to place orders ahead of an expected rise in the import tax. ...

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Retail consumers drive Gold demand in India

Retail consumers drive Gold demand in India | Gold and What Moves it. | Scoop.it
India's gold demand surged 41% in the fourth quarter of calendar year 2012. World Gold Council (WGC) data showed the countrys demand at 262 tonnes in the quarter, compared with 185.5 tonnes in the corresponding period previous year.

 

By Dilip Kumar Jha
Retail consumers unabated appetite to own an additional piece of gold has so far nullified the governments efforts to curb its import, in order to control the burgeoning current account deficit (CAD).

India's gold demand surged 41% in the fourth quarter of calendar year 2012. World Gold Council (WGC) data showed the countrys demand at 262 tonnes in the quarter, compared with 185.5 tonnes in the corresponding period previous year. Despite the governments four-fold rise in customs duty to discourage gold import, there was only a 12% decline through 2012, at 864.2 tonnes, compared with 986.3 tonnes in the previous year.

Indias gold demand is largely driven by a combination of retail and urban consumers. ...

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India unlikely to offer Gold for oil scheme to Iran again

Though Gold is a highly unlikely payment option, India categorically stated that it would continue to purchase Iranian oil, which is imperative for the country's energy security.

 

NEW DELHI(BullionStreet): India is unlikely to use gold as a payment option for it's Iranian oil import after the country stopped money transfers to Iran through Turkey's Halkbank because of U.S pressure.

 

Many analysts said India is in the process of cutting gold imports and cannot afford to take up any official dealing involving gold even for oil purchase.

 

India annually buys oil worth $ 11 billion ...

Hal's insight:

How are those sanctions working now? And does anyone really believe they won't use their gold as a payment?

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India to introduce PAN must scheme for Gold purchase

Currently, banks account for about 60 per cent of the total gold import.

 

NEW DELHI(BullionStreet): World's largest gold consumer India on Wednesday came up with yet another plan to check climbing gold demand.

 

An RBI panel proposed a slew of measures like mandatory quoting of PAN numbers for high-value purchases, restriction on gold loans and check on NBFC branches dealing with gold loans.

 

The panel also suggested cheque payment for gold purchase beyond a threshold, introduction of other savings products to discourage investment in physical gold, prohibition of bank finance for buying gold and revival of the two-decade old proposal to set up a Bullion Corporation.

 

Indian central bank is also planning to impose limits on volume and value of gold import by banks under extreme situation. ...

Hal's insight:

And so it continues.

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India fiscal deficit widens on gold imports

The deficit during April-December period is almost 79 percent of the budgetary estimate of Rs.5.14 lakh crore for the entire financial year ending March 31, 2013.

 

NEW DELHI(BullionStreet): Justifying government's concerns over climbing gold imports, India's fiscal deficit widened to Rs.4.07 lakh crore (around $76 billion) in the first three quarters of the current financial year.

 

The deficit during April-December period is almost 79 percent of the budgetary estimate of Rs.5.14 lakh crore for the entire financial year ending March 31, 2013.

 

As the government struggles to rein in a raging current account deficit that is likely to cross 4% of the national economic output this fiscal, it has increased the import duty on the precious metal thrice since last year. ...

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India's Gold import duty hike to increase smuggling

India's Gold import duty hike to increase smuggling | Gold and What Moves it. | Scoop.it
Imports of gold reached 223.1 tonnes in the third quarter of this year, up 9% from a year earlier, according to the World Gold Council. India accounted for 30% of global consumer demand for gold.

 

By Rebecca Bundhun, Tom Arnold
India's increased import duty on gold is expected to prompt more smuggling of the precious metal into the country.

The government this week increased the import duty on gold to 6 per cent from 4% in a move intended to curb the high demand that has been a significant factor in the country's gaping current account deficit. 

"If this is imposed strictly it will lead to illegal smuggling of gold," said Chetan Dhakan, the owner of National Jewellery, a gold trader in Dubai's Gold Souq in Deira. "People always find a way to move gold."

India's government also took a series of steps last year to try to reduce gold imports, including an earlier increase in the import duty and banning banks from lending money to customers to buy gold.

"Gold demand has risen as a hedge against inflation," said analysts at Nomura. "Therefore, we think ...

Hal's insight:

I'm shocked, shocked, I say!

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Tax cuts on 'Paper Gold' may trim India Gold import by 70%

Tax cuts on 'Paper Gold' may trim India Gold import by 70% | Gold and What Moves it. | Scoop.it
India's gold imports could fall much further, by 60% to 70% if the government also presses ahead with plans for gold bonds and a controversial proposed tax amnesty on such investments.

 

NEW DELHI(BullionStreet): Any further hike in gold import duty could trim India's imports by 25 percent this year, according to All India Gems and Jewellery Trade Federation.

 

Federation chairman Bachhraj Bamalwa said he believes import duty on gold will be hiked to 6% in the budget scheduled for Feb. 28.

 

The basic customs duty on standard gold bars is 4 percent and the levy on non-standard gold is 10 percent.

 

He added that if the government also presses ahead with plans for bullion-backed paper investment products such as gold bonds and a controversial proposed tax amnesty on such investments, imports could fall much further, by 60%-70%.

 

Increase in duty will make gold costlier and at this price investors will not be interested,he warned. ...

Hal's insight:

Manipulation in the open.

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