The DGCIS, India’s customs department, has just released the trade numbers for January 2014.
As we predicted, another result from the Indian restrictions in gold trade (besides a soaring Indian black market for gold) is that many Indians flocked to silver.
2013 Indian net silver imports broke all records at 6016 metric tonnes. The Indian gross monthly import average in 2013 was 512 metric tonnes.
In January 2014 gross silver imports was 461 metric tonnes, up 51 % y/y!
Submitted by Koos Jansen, In Gold We Trust:
Strangely For gold and silver India only discloses the import numbers.
To calculate net imports I’m aware of only one other source; COMTRADE, but they haven’t catched up until January. For gold we know the Indian government implemented the 80/20 rule in August 2013, meaning gold traders have to export 20 % of their imported gold. By knowing how much gold was officially imported we can thus calculate how much was officially exported.
India officially net imported 28 metric tonnes in January 2014, up 12 % m/m, down 77 % y/y.
However, the official numbers on gold import have very little correlation to Indian demand as the majority of gold is smuggled into the country. The main reason for this is India’s import duty on gold that was raised in January 2013 from 4% to 6 %, in June to 8 % and in August to 10 %. Resulting in high premiums and increased smuggling. This chart is from Nick Laird, sharelynx.com:
In this video by Sunny Pannu from Minaurum gold, Indian gold expert Jayant Bhandari explains the current situation in the Indian gold market.
Another result from the restrictions in gold trade is that many Indians flocked to silver. 2013 Indian net silver import broke all records at 6016 metric tonnes. The Indian gross monthly import average in 2013 was 512 metric tonnes. In January 2014 gross silver import was 461 metric tonnes, down 44 % m/m, up 51 % y/y.
In Precious Metals We trust