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Gold-Squeeze In India Stokes Silver Demand

June 28th, 2013

gold and silverJeff Nielson: There was more mind-blowing news this week in bullion markets. This is to be contrasted with the deluge of shrill, gold-bashing propaganda being cranked out by the Corporate Media at maximum decibels. As usual (these days); the news centers on India’s bullion markets.

As has been mentioned in numerous previous commentaries; Indian bullion-buyers are notoriously price-conscious. So the recent, unprecedented rape committed in the paper-gold and paper-silver markets has been nothing less than a dinner-bell “chime” for Pavlov’s Dogs.

Gold and silver on sale…at (literally) once-in-a-lifetime-prices.


As reported by many commentators within the sector; gold demand (i.e. demand for real gold) in India has been nothing less than insatiable. This is despite a six-month propaganda blitz by the banking cabal to try to steer Indians into the fraudulent, paper-called-gold market.

The complete failure of that propaganda campaign has prompted a rapid-fire series of what can only be termed “desperation measures” within India. First the Indian government jacked-up import duties on gold. Then (in a world which runs on credit) it prohibited any of the Indian bullion banks from importing gold on credit.

Now we have the most-outrageous move yet:

The All-India Gems and Jewellery Trade Federation (GJF) has asked its members not to sell gold coins and bars to curb imports of the precious metal, and help the government reduce the current account deficit…

This move is effective July 1st. As has been previously explained; there is no “current account deficit” in India resulting from the importing of gold (which is a currency). This is all just an accounting sham. Thus all these moves are aimed squarely at suppressing gold demand in India – blatant restraint of trade, targeting only precious metals.

The increasing desperation is the product of staggering numbers on Indian gold imports. How large are the numbers? We’re no longer quite sure. After reporting massive imports of over 142 tonnes in the month of April; it was originally reported that India’s gold imports exploded to 262 tonnes in the month of May.

This was followed by a near-immediate retraction; with India’s finance ministry (supposedly) claiming it had “made a mistake” in reporting its own gold imports, and the correct number was ‘only’ 162 tonnes. A “typo”? In an official, government release? Are we to believe that in a nation of more than 750 million people that the Indian government can’t find anyone to proof-read its own, official press releases?

While we must suspect that Indians actually imported over 400 tonnes of gold in the months of April and May alone; for the sake of argument, let’s accept the propaganda. India imported more than 300 tonnes of gold in April and May. And with the desperation-measures just being escalated again; we can expect another large number for June’s imports (or perhaps another large lie?).

Regular readers will clearly remember the news trumpeted previously that central bank gold-buying has soared to “all-time records”. Even at record levels; these banks are expected to collectively import less than 600 tonnes of gold all year.

This is still an enormous number. Previously, the central banks were able to squash the gold market for many years; primarily as a result of central banks dumping 500 tonnes per year onto the market. Then there is Indian gold-buying.

Even at the suspicious, lower figures; this puts the Indian gold market on an annual pace of importing close to 2,000 tonnes per year. Total, annual global mine production is less than 3,000 tonnes. And with the banksters’ scorched-Earth attacks on the mining companies; supply will almost certainly start falling next year – if not already this year.

Then there is China. None of the gold produced by China ever leaves the country. The Chinese government scoops up every ounce, and China is the world’s leading gold-producer. That takes global mine-supply down to around 2,000 tonnes – meaning Indian gold-buyers alone could soak-up every available ounce of gold mined each year.

Then there are the Chinese gold-buyers (separate from the government of China). China’s population of 1 ¼ billion imported nearly 400 tonnes of gold in the first quarter; but more than half of those imports came in the month of March alone – and this was before the banksters slammed bullion prices in April.

Second quarter numbers aren’t available yet; but it would not be unreasonable to expect double the first quarter numbers (given the numbers we have seen in India). That would put China’s market on pace to equal or even surpass India’s gold imports. However, even if we anticipate a ‘mere’ 50% increase in China’s gold imports in the second quarter; we are left with the following parameters.

By themselves; China and India’s 2 billion residents are now importing gold at a pace of roughly 4,000 tonnes per year (or higher); in a world with only a little more than 2,000 tonnes of annual mine-supply. Note that by no means does this represent “total demand” in these markets. These are merely the incremental quantities of gold which must be brought into these markets to satisfy (rabid) domestic demand.

The lying banksters and lying drones in the Corporate Media call this a “bear market”. If the U.S. government was forced to greatly restrict sales of U.S. Treasuries “due to overwhelming demand”; obviously these same liars/hypocrites would not call that a “bear market”.

But this is certainly not the only market-shattering news out of India. We get this from Gold Core:

While India imported 1,900 tonnes of silver in 2012, in the first five months of 2013 alone, imports have touched 2,400 tonnes.

According to industry estimates, silver imports during the January-March quarter stood at 760 tonnes. Imports shot up 720 tonnes in April alone, and in May, they further swelled by 920 tonnes.

Where will Indian silver imports go from here? Fans of the Law of Unintended Consequences can answer that question. As India’s market-Nazis make it more and more difficult and more and more expensive for the Indian people to store their wealth in gold while bankster-shorting makes silver cheaper and cheaper; what will India’s ¾ of a billion people do? They will buy even more silver.

At this point, readers of my own, most-recent commentary may start getting excited (Surging Silver Sentiment Signals Spiral):

In 2011 as the silver market was spiking to its short-term peak; total silver demand in India spiked along with it – all the way up to over 4,400 tonnes. When the silver market sagged in 2012 following the banksters great silver massacre; Indian demand fell with it, declining to a little over 3,200 tonnes in 2012.

when sentiment in the Indian silver market took off, not only did demand spike but silver imports went absolutely ballistic. When India was consuming 4,400 tonnes of silver in 2011; more than 90% of that silver was imported silver – i.e. coming out of global inventories. Even at short-term highs in price; Indians were hoarding not selling their own silver.

The message here is clear, and two-fold. First of all, India’s silver market has clearly turned. The bankster market-rigging has taken the price too low – and ignited the appetites of the world’s most-rabid (and value-conscious) bullion-buyers. Secondly, in a rising market (which must result from such relentless draw-downs in inventories); Indians will be only buyers of silver. In thisgigantic bullion market (containing much of the world’s remaining stockpile of silver) there will be little-to-no “scrap” selling.

So as the government of India ‘puts the screws’ to Indian gold-buyers (with the Western banking cabal nodding its approval from the shadows); the only possible consequence is to create an equal if not larger stampede by Indians into silver.

Between the “laws” of supply-and-demand and Unintended Consequences; the (lawless) banksters are about to get a lesson in law. The lesson is this: simply because you’re able to violate laws with impunity (by being based in a nation with no respect for the Rule of Law) does not mean that laws cease to exist.

We can’t prevent this financial Crime Syndicate from taking their (fraudulent) paper-prices to any arbitrary number they desire. They cannot prevent the rabid demand for real metal which this will incite not merely in India and China, but much of the world.

Driving these markets to (inventory) default and/or Decoupling can only result in an even more-radical boomerang higher in prices…one way or another. Despite all the paper-fraud, these remain (real) “physical” markets, where actions have consequences.

This article is brought to you courtesy of Jeff Nielson From Bullion Bulls Canada.


NYSE:GLD, NYSE:SLV


 

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  1. Liberty
    June 30th, 2013 at 22:06 | #1

    Been buying physical silver since the late 1960s, when my dad took me to a coin shop. Still buying today.

    Paper silver is a giant banksters fraud, physical in your hand is real!

  2. Ponce
    June 28th, 2013 at 16:29 | #2

    The world is finally learning that…

    “If you don’t hold it, you don’t own it”… Ponce

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