Strong Eastern Gold Demand
Data coming out of the ‘East’ over the last week is nothing short of amazing. In India the 450% increase in gold imports has blown their national trade deficit out to an 18 month high of $14b despite the 10% import duty still being in place. Encouragingly too, talk of them ‘un relaxing’ the recent exempting of 7 trading houses on the 80/20 import/export rule have been dismissed by their central bank. In China the last reported week saw over 68t of gold consumed, the 3rd highest on record and over 3500t annualised (against global production of only 2700t and their record consumption of over 2000t last year). Year to date they have already imported 957t. Silver on the Shanghai Futures Exchange remains in backwardation driven by scarcity on the back of an inventory of only 94t. Russia too continues to build its reserves in gold with September seeing them add their biggest amount in any month with 1.2m ounces or over 37t, taking their total holdings to 37m oz or 1150t.