Market Update GoldCore
India Should Monetise 20,000 Metric Tonnes Of Gold
Today’s AM fix was USD 1,399.50, EUR 1,066.69 and GBP 906.12 per ounce.
Yesterday’s AM fix was USD 1,396.50, EUR 1,068.89 and GBP 909.42 per ounce.
Gold gained $3.90 or 0.28% yesterday to $1,402.10/oz and silver finished down 0.09%.
Gold initially traded down over uncertainty on whether the U.S. Fed will decrease its QE and adjusted to the news of
India's hike on import duties for the yellow metal.
Click for big version.
India should monetise their huge gold stockpiles of over 20,000 metric tonnes according to the World Gold Council (WGC)
as reported by Bloomberg this morning.
Exactly how the considerable store of wealth that is the gold of Indian people could be monetised was not said.
The move comes close on the heels of a desperate series of steps taken by the Indian government as well as the central
bank, aimed at reining in gold imports which is contributing to the rising current account deficit.
Click for big version.
Gold In Euros, 5 Year - (Bloomberg)
The World Gold Council said that they recognise the need for the recent government measures to contain gold imports, but
warned that if such a strategy remains in place for long, it may lead to proliferation of the grey market, like it was
before India liberalized gold imports about 15 years ago.
Indeed, there already reports of gold being traded in the black market in India. India's consumer inflation remained
high at 9.39% in April while deposit rates in banks are between 6% and 8.5%.
Governments, in India and internationally, need to manage their economies better and rein in inflation and make their
currencies a store of value that people will trust.
People who own gold will be seen as prudent in time ... much more prudent than those who discourage gold ownership or
those who do not own any gold whatsoever.
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April's edition of Insight takes a close look at the recent banking crisis in Cyprus and how it is causing other states
to consider the imposition of taxes on depositors' savings. The reasoning behind these 'taxes' is to part cover the
colossal levels of indebtedness that most nations find themselves in.
Chris Sanders, our Insight April contributor, maintains that it is only capital accumulation enabled by real economic
growth that can alleviate the massive levels of indebtedness. Unfortunately, Sanders finds that this is nigh on
impossible given the excessive energy costs required, or as he puts it, 'the marginal energy to power such growth is not
there to do so.'
On April 15th, a small number of traders executed a suspicious sale of futures on the COMEX in New York which resulted
in an 18% fall in the price of gold. Sanders points out that on the one hand we have this level of indebtedness that
isn't going to go away, and on the other, we have a financial system that appears to operate outside the general rule of
law. When you take everything into account, Sanders surmises that it's all a great advertisement for holding gold or
silver in secure storage on an allocated basis.
ENDS