silverIndian premiums on gold, currently 15 % above international prices, pushed massive amounts of Indian savers into silver in 2013. Indian silver imports in 2013 were 6125 tons, an all-time record, up 189 % from 2115 tons in 2012.
In December, silver imports accounted for 825 tons, up 108 % month over month, and up an astonishing 6560 % year over year!

Submitted by Koos Jansen, In Gold We Trust:

India’s customs department DGCIS just came out with their final trade numbers for gold and silver in 2013. Only gross import numbers for both precious metals are disclosed in these reports, the export numbers I grabbed from the Comtrade database (although these numbers are quite insignificant).


Starting from August 2013 all Indian traders had to export 20 % of their gold imports. This was a measure designed by the government, on top of an import duty that was raised to raised to 10 %, to slow down gold import. Of course the only result from these measures was that official gold import dropped like a brick, premiums skyrocketed and Indian supply shifted to smuggling. In this next chart by Nick Laird we can see how the import duty pushed the premiums to 25 % in january.


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Indian Premiums 2014



The loss for the Indian government is that they miss revenues since they raised the import duty from 4 % to 10% through 2013 and implemented the 80/20 rule. Crime has taken over gold trading with all due consequences. Sadly history repeats itself. Official imports crashed hard through 2013.



India gold tm 2103



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India gross imported 173 t in H2 2013, down 73 % from 631 t of in H1. Total gross import in 2013 was 804 t, down 20 % from 999 t in 2012. From Jayant Bhandari, who travels a lot through India, I’ve been told that smuggling gold into India is quite easy as customs at the airport and the army at the border are happy to take a bribe. He wrote me:


Some of it comes via planes (via Dubai and Singapore, legally and illegally), some through the Bangladesh border and a minor part through Nepal and Pakistan. I don’t think it is worth the risk to bring it via China. Bangladesh border is the easiest, a few dollars of bribe to the army guys does the job.


I often hear analysts saying that there is shortage of gold in India. Incorrect. It is more liquid a commodity than water is. The spread is so thin that you can often buy and sell at the same price — the trader makes his margin from making jewelry.


Before the 90s, import of gold was heavily regulated and carried a massive customs duty. Of course, in those days most gold arrived in India through smuggling. A big mafia had built up in Mumbai and Dubai, mostly catering to India’s gold demand. Two things happened as a result: Government lost all prospects of earning revenue from gold imports, and most importantly, smugglers ran a ruthless empire in several Indian cities, particularly in Mumbai, controlling human-trafficking (with horrible consequences for poor girls and children) and financing the real-estate and the film industries. They were the unofficial rulers of Mumbai. When restrictions on gold were eased in early 90s under pressure from IMF, the same smugglers took the shape of what got to be known as terrorists. (All this should not sound strange to those who understand the history of prohibition in the US).


The current restriction and heavy custom duty on gold will repeat the consequences of the era before the 90s. But really in an irrational world where rhetoric has more value, who cares about the real consequences? Indeed, based on my many conversations with traders, all gold that India needs is already coming through smuggling. And smugglers want restrictions on gold imports to stay in place — they haven’t had it this easy for a long time.



The premiums on gold, currently 15 % above international prices, pushed a lot of Indian savers into silver. Indian silver import in 2013 was 6125 t, an all-time record, up 189 % from 2115 t in 2012. In December silver import accounted for 825 t, up 108 % m/m, 6560 %  y/y.
The Real Asset Co. Buy Gold Online
India silver import 2103



I wonder if the current Indian government is satisfied about its 2013 precious metals policy and if the next government will choose the same path.



Koos Jansen

    • By the way, Russia bought for next to nothing all stock shares of Russian monopolies in Ukraine, when prices have collapsed.
      It was a new Russian greetings for west banksters from Mr. Putin. LOL

  1. A little Crow with your Eggs Benedict this morning, Mr. Morgan?

    Perhaps it was a ‘Reverse-Curse’ when David Morgan changed his public position to gold’s leadership role as extracting the bullion market from the manipulators’ grip … only days before this figure broke. I can’t say I blame him, but ‘Mr. Silver’ should have stayed the course. ‘The Queen’ is displeased that his devotion to her was shaken.

  2. USD  Breaking Bad.  Silver Breaking Good.  Roger that Sheep Dog
    ANd what have I been yapping about re India silver purchases.  197,000,000 ounces in 2013  150,000,000 in 2012
    India will probably import well over 200MOZ, maybe 250 MOZ in 2014.  China ditto

      Silver global supply = 1,050,000,000 oz or 32,812 tons/yr (mining / scrap)

      Total global inventory of silver is less than 1 B oz (below 32,000 tons)…down from 9 billion in 1950.

      50% = industrial users (16,400 tons)
      25% = jewelry / silverware (8,200 tons)
      25% = investment demand (8,200 tons)

      India in ’13 increased from 2100 tons to 6100 tons = a 4,000 ton increase or 50% of all silver available for investment? 

      While mint sales worldwide were at record pace while industrial / jewelry maintained their usage. 

      And price collapsed although the silver ETF’s did not off-load to meet the demand as their cousins did in the gold market (silver ETF’s supposedly have 700 million oz or just under 22k tons)

      Either somebody has far more or far less supply than they are admitting to have met the ’13 demand coupled w/ a crash in price? Either this is the greatest mismatch of supply / demand and the greatest mis-pricing of an asset in history or I’m missing something? When I try to explain to people this situation, they simply can’t believe such an extreme mismatch is possible…which makes me wonder if I’ve got it all wrong?

      Please double check the math and the assumptions…

      And yet I don’t hear a peep from industrial users or mints or bullion dealers that they cannot source silver or are seeing any tightness causing a bidding war. Somewhere, somehow either all the assumptions are wrong or ???

    • @Hambone
      From SRS, “total supply outstrips demand by 178 million ozs (2013)”  “In 2012, the difference between supply and demand was 201 million ozs”   “the 178 (and 201) million oz surplus does not include investment demand from standard bars and bullion coins that are not in the “official coin” category”
      So we can see even if we include the investment demand from non-official coins, we still end up with a excess supply of silver every year, I highly doubt that the non-official coin category is equal to the massive amount of silver surplus taking place every year.
      At the end of the day, with so much surplus taking place in the market, $21 oz is the proper price.

    • @ Zman – based on ’13 World Silver Survey data…total silver supply peaked in ’10 @ 1,076 million oz…’11 @ 1,039, ’12 @ 1,048 oz…’13 was expected to remain flat.
      the ’12 implied net investment (beyond official coins) to net supply w/ demand was 160 million oz…in ’13 India alone increased their purchases from ’12 by 128 million oz (meaning the rest of the world disinvested by the same 128 million…but nowhere in the data is this supported and in fact quite the opposite visible in every category).

      I’m not saying you are wrong because the price is what it is…I’m just saying the incredibly stupid assertion that data doesn’t support the current price or that price doesn’t support the data.

    • @silversavings
      In case you missed it, we are discussing the supply and demand dynamics of the silver market. We have a surplus of silver, so the manipulation theory just doesn’t work for that market.
      As far as the gold manipulation allegatons, yes the banks do manipulate the trading range of the gold market and profit from it, but no one ever stated that price suppression was taking place,  trading manipulation does not equal price suppression.
      If the global PM market truly thought price suppression was taking place, we wouldn’t be trading at $1350 and $21 oz today.

    • @Hambone: From the silver institute, total fabrication (industrial, photography, jewelry, silverware, coins & medals) all went down during those periods along with flat investments. Your are right, what we read does not match the data and this proportion of missing silver is pretty outlandish.  

    • You know I was thinking about this yesterday. By my accounting that would gobble up around 20% of the silver produced in a year. IF the numbers we see are right, then what 70-75% of silver goes to industrial use. This would, theoretically leave virtually nothing for any other investors and we know silver sold like a motherfukker last year.
      That has to lend some credence to silversavings’ comment that there was a washout of phsyical somewhere, or raiding the few cupboards they might have.
      Sum total, we’re one step closer but I got no idea how close that is.

  3. WORLD WAR THREE HAS STARTED!    We are in a spiritual warfare!   Please do not panic, Jesus Christ is King over all both physically and spiritually (Rev. 1:5; 2 Cor. 10:4; 1 Tim. 1:18).
    Our weapons of warfare are not carnal; however we must use gold and silver, lay it up for troubled warfare ahead and give it to God along with other worship so that we might have treasures in heaven (Did you know that gold and silver are one of the few physical things you can beam into heaven through worship?).  The world today is playing a game of musical chairs, fewer chairs (monies) than fiat currencies marching around the room.  Yes you can still trade your dollar for gold or silver until the music stops.  The U.S. dollar dropping now below 79% is a strong indication that the music will stop sooner rather than later.     
    We do not use our weapons against this spiritual enemy, as they are able to take our lives (they have drones).  For now we secure our swords not under a basket, but our lights inside a picture readying for a future explosion of righteousness (cf. Judges 7:20).  We stop identifying our enemies by name and sin, and use coded messages (they are simply constitutional liberals) because the Roman Concellia (NSA) is watching over us demanding that we proclaim our government as Lord, and yes they will literally take your life for not proclaiming obedience.  We arm ourselves with the truth of God’s word – knowing that right and the constitution will be victorious in the end, as  “Righteousness exalteth a nation: but sin is a reproach to any people. Proverbs 14:34).    We pray to God that He strike down our enemies!
    Then we have the peace that passeth understanding, and we can be faithful until we die, unafraid of losing our bodies to war.   But we have great reason for optomism because God has given unto us all things that work together together for Good (meaning- The Father, The Son, The Holy Spirit, and an army of righteous Christians worshiping God in the Kingdom of heaven, and an army of righteous Americans who believe in the constitution and who will die defending it) and God has given to the enemy satan, sinful man’s way of thinking including unlawful marriages, unlawful divorce, abortion, obamacare, etc. all.  The way i see it our odds are much better as even one man with God is a majority on any battlefield!
    It is time to stop preaching peace peace when there is no peace and recognize that we are in a spiritual and physical war.  We are in WWIII!

  4. The only way these numbers could be fulfilled is if their was a washout of physical silver holders at some point over the course of the year. I do believe these raids had some efficacy and even those who were relatively strong capitulated at the lows last year by selling their physical. The good news here is that this prolonged correction has now removed all physical weak hands, meaning future raids are more self-defeating to the cartel i.e. much more physical silver is bought rather than sold during each raid. With Indian demand this high and only the resilient remaining in the silver market, while the spot price remains near all-in mining costs tells me the path of least resistance is UP and way UP for the price in the short run. The cartel doesnt have a choice. I think the cartel is cornered.
    Let the price rise and risk momentum guys jumping in. Let the price fall/remain constant and the same amount of buyers can obtain significantly more metal than the market can indefinitely provide. I think this thought process explains the methods employed currently by cartel. The slow, steady rise of both gold and silver this year, with clear capping at certain prices, to only eventually allow the steady gains to resume. This is a slow, controlled rise, in an attempt to avoid/prolong supply problems on either side – the price on the way up, or price on the way down/constant.

    • Aren’t there a hundred times more of them in their population? Why has this dumb line of thought gained cache here? Have a lot of impressionable teens recently come on board?

  5. @zman
    Really?? Really??? LOL. The two metals have a correlation greater than 0.9 and so you’re trying to tell me that the gold market is manipulated and NOT silver??? Wow. Zman, you’ve just managed to hit a new low, and that was a very difficult achievement to attain.
    Back under your rock! LOL.

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