Gold Crisis In India As Premiums Hit $100/Oz - Gainesville Coins News
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Gold Crisis In India As Premiums Hit $100/Oz

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Gold Crisis In India As Premiums Hit $100/Oz

gold-bazaar

As the government in New Delhi continues to strangle gold imports to reduce a crippling trade deficit, premiums on the spot market have spiked to unbelievable levels. With the fall festival and wedding season cranking up, there is literally almost no gold to be had. In the last week, premiums have more than doubled from $40/oz to $100/oz, for a premium of 8% over London spot.

Spokesmen for jewelers association blame confusing import rules, a 10% tariff on imported bullion and a 15% tariff on imported gold jewelry. Most what little gold that is available is coming from people selling scrap jewelry to take advantage of the skyrocketing prices. One jewelery wholesaler said "we are helpless to buy at such high prices." Some larger jewelry chains are accusing smaller competitors of supporting smugglers by buying gold on the black market. Gold smuggling in India, which the World Gold Council estimates to hit 200 metric tonnes this year, has become extremely lucrative.  Even so, an estimated 1/3 of all jewelry artisans are jobless despite the public's ravenous appetite for gold - there's simply no gold to make jewelry from.

The heaviest gold-buying season in India, the world's top gold importer, begins in two weeks. What will happen when there are no festival and wedding gifts available, at any price?

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