Gold News

India Gold Smuggling "Near 200 Tonnes": WGC

Gold smuggling may worsen CAD by 20% on new estimate...
GOLD SMUGGLING into India, the world's former No.1 consumer nation, is far ahead of official estimates, according to market-development organization the World Gold Council.
India's official statistics show gold imports falling by almost two-thirds between July and October. But while finance minister P.Chidambaram says smuggling may total 1-3 tonnes per month since midsummer, and leading consultancy Thomson Reuters GFMS say total 2013 smuggling may have exceeded 150 tonnes, the World Gold Council's information suggests "unofficial flows may be considerably higher."
India has no domestic mine output. On the World Gold Council's data, released today in its new Gold Demand Trends report for full-year 2013, total Indian demand in 2013 reached 975 tonnes, the third largest volume on record.
"We have previously been on record with our estimate [for Indian gold smsuggling] of between 150-200 for 2013," says the mining-company owned Council, "and we feel that the total for 2013 was closer to the top end of this range."
An extra 200 tonnes of gold at 2013's average price would add another $9 billion to India's Current Account Deficit, estimated this week by Mr.Chidambaram at $45bn for the fiscal year ending this March.
The government's lower CAD estimate has sparked fresh speculation that gold import rules may be eased before India's elections in May. But analysts agree that some form of restriction is likely to remain in place for some time to come. 
"Unofficial gold will undoubtedly continue to supplement official inflows," says the World Gold Council, "as latent demand among Indian consumers remains healthy."
Backing up this, the WGC's new report includes a chart of gold consumer research conducted on its behalf in both India and China during January 2014. Some 36% of India respondents said they plan to buy more gold this year than last, with a further 39% planning to repeat their 2013 spending.

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