India's Gold ETFs Given All-Clear on Using Bank-Deposit Gold

TODAY in India – the world's #1 consumer of physical gold – the government approved use by exchange-traded gold trust funds of physical gold deposited by households with retail banks, according to local press reports.

Following a series of import-duty hikes and pleas from ministers for consumers to curb their personal gold demand, the Securities and Exchange Board says Indian gold ETFs – which currently hold some 40 tonnes of metal – can hold up to 20% of their assets in gold put on bank deposit by consumers.

India's private gold holdings are estimated at perhaps 20,000 tonnes, reports the Financial Chronicle. Annual imports to meet new demand are widely blamed for India's worsening balance of trade deficit.

Meantime in the United States, hedge-fund manager John Paulson maintained his $3.5 billion position in the New York-listed SPDR Gold Trust at the end of 2012, US regulatory filings showed Thursday.

But George Soros' largest hedge fund cut its position by more than one half between October and December.

Total holdings in the giant SPDR Gold Trust rose meantime, with the total volume of bullion held to back shares in the $70 billion gold ETF rising 2.2% in the fourth quarter and recording a series of all-time highs above 1350 tonnes in December.

Yesterday those holdings shrank for the second day running, shedding another 3 tonnes and dropping back to 1322 tonnes, the lowest level since early October.

Latest US regulatory filings also show Julian Robertson's Tiger Management quitting its position in one gold-mining fund, but retaining its stake in a junior miners ETF.