Julian Phillips thinks gold prices will be pushed higher by an easing of duties and restrictions on Indian gold imports.
Since last August, the Indian government placed a stranglehold on gold imports into the country by requiring that 20% of all gold imported be exported as jewellery. This forced the amount of gold imported to drop to 30% of former levels until October of last year. Then the amount imported rose to 38 tonnes a month and has been at that level since then. The amount of gold that was expected to be imported for the year was north of 1,200 tonnes. It only achieved an imported total of 825 tonnes, around 400 tonnes less than expected.
Lifting of restrictions
If the Indian government eases these restrictions in the end March budget seven days ahead of the elections (and we expect they will), will it cause a jump in demand from the London market –where India sources its gold from—sufficient to send the gold price soaring? It appears so, until we peer under the obvious at the basics. ...