Gold Smuggling Runs Rampant In India

  • Posted Wednesday, August 13, 2014 at 01:37 PM

Los Angeles CA, August 13 (Tangible Investments) - by James O’Dell - The Gold price edged modestly higher on Tuesday, gaining $0.65 or 0.05 percent to close at $1,308.80 an ounce, as the yellow metal continues to consolidate above the $1,300 an ounce level while the dollar gained against a basket of major currencies which weighed on the metals. The price of Silver eased $0.13 or 0.65 percent to close at $19.91 an ounce, as the Gold/Silver ratio rose to 65.74.
 
"It seems that the $1,308-9 level has become a bit of a magnet to the market as it is not any clearer what the focus should be at the moment," said Saxo Bank's Ole Hansen. “Geopolitical safe-haven demand has triggered higher Gold prices recently,” said Yang Xi, of Yongan Futures Co. “On the macroeconomic front, as the pace of recovery in major economies diverges, so will monetary policies, and that will be a driver for Gold.
 
On the physical front, demand in China remains lackluster.” Gold imports by India, the world’s second biggest consumer, will most likely decline for a third year after the new government of Prime Minister Narendra Modi decided to keep curbs on Gold shipments in place to prevent the current account deficit (CAD) from rising and to bolster the rupee.
 
In the meantime, smuggling is running rampant as Indian Gold smugglers adopt some of the same methods used for years by drug couriers to get Gold into the country tariff free. Government figures show that less than three tons of smuggled Gold was retrieved last year, while the World Gold Council (WGC) estimates that between 150 and 200 tons of Gold is currently entering the country illegally.
 
Given the unprecedented surge in smuggling, Gold is easily available in the market, so investors see no real urgency to bring the precious metal into the country through legal channels.
 
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Metal BID ASK CHG$ CHG%
Gold 1212.10 1212.80 $1.90 0.16%
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