India's Scrap Gold Dries Up
India's surge of scrap-gold supplies has dried up, despite new record prices...
INDIA RECENTLY reported a fall in gold scrap sales as people have been holding their gold in anticipation of further increase in the prices of yellow metal, even though it touched 16,000 Rupees per 10 grams, says Commodity Online from Mumbai – a new record in local currency.
In Kerala, Gujarat and Maharashtra, jewelers report a huge fall in scrap gold sales from existing owners, whereas in February this year India reported huge scrap gold inflows coming back onto the market. Thus India, typically the biggest importer of Gold in the world, reported near nil imports of the yellow metal during the first quarter of the year.
Across in Australia, in contrast, and with US-Dollar Gold Prices making headlines above $1,000 per ounce and recession continuing to haunt the developed world, the scrap gold business is booming.
Consumers in Australia, joining programs first launched in the US and Britain, are now rushing to take advantage of soaring Gold Prices to offload unloved or unwanted gold items. Recent press reports show cash-strapped consumers trading in everything from old engagement rings and broken lockets to coins and mismatching earrings.
Several jewelers trading in old gold have also reported a huge rise in business.
The case is different in Kerala or Gujarat. Jewelers have seen a fall in scrap gold arrivals, even though they are witnessing a slip in demand during this current festival season compared with last year. The reason for that, they say, is that rural buyers are staying away from jewelery because of the high prices. But recently, trade-marketing group the World Gold Council launched a Great Indian Gold Rush campaign to woo back customers.
Scrap Gold sales in Australia, on the other hand, have seen a jump of around 50%. The gains enticing jewelery and scrap sellers have also led to a proliferation of online scrap gold companies.
On the other side of the market, Australia will most likely overtake South Africa and the US as the world's second-largest producer of gold this year, as new mines in Australia come on line, with a giant facility south of Perth beginning production of what is expected to be an output of a million ounces a year.
After recent falls, Australia's gold output has returned to being worth about $7 billion annually. Prices for gold are approaching $1,000 an ounce and international investors, especially those in China, are taking a keen interest in the Australian mines.
China remains the world's largest producer of gold, overtaking the US and South Africa in 2008. It is also the world's No.1 consumer market, overtaking India during the first half of 2009.
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