Daily Nugget: India Gold Smuggling Increased 800% Last Year

‘This could be the beginning of the end for the market bubble,’ so read Allister Heath’s column in this morning’s CityAM. Yesterday market turmoil followed the US’s upgrade to ‘stable’ and Japan’s decision to take the foot off the easing pedal.

The gold price fell 0.72% yesterday as the markets appear to be focussing all of their attention on the US QE decision, as Bloomberg said this morning ‘the market is fixated on the Fed’. For gold, which also fell yesterday, China’s holiday leaves little support for the current gold price.

In a report released earlier Goldman Sachs say that they expect to see gold trading at $1,345 over the next 12 months.

Bloomberg reported this morning that gold premiums in Vietnam, South East Asia’s second biggest-gold buyer after Thailand, are set to decline after the 30 June deadline has passed for banks to return deposits to investors. At the moment the State Bank of Vietnam are auctioning off gold to authorized banks in the hope to keep up domestic supply.

Reuters report that the Indian economic affairs secretary Arvind Mayaram has said that the government does not need to take further steps to dissuade gold investment as recent measures have already had a significant impact. Gold investment demand in India is being reported as very low, this may be thanks to government or efforts but it is more likely to be down to the Rupee’s weakness and gold’s highest rupee price in 2 months.

Of course official figures of those looking to buy gold do not cover those who are smuggling it in. Yesterday’s Times of India reported a ‘spurt’ in smuggling. ‘Customs authorities at the IGI Airport here held two men with over 2.6 kg gold worth close to Rs 70 lakh. While a man from UP was arrested with gold worth over Rs 19 lakh, another person from Bhatkal in Karnataka was arrested with Rs 50 lakh of jewellery.’ All were smuggling gold from Dubai. Gold smuggling, the paper reports, increased by 800% last year.

Some analysts are expressing concerns of silver’s breakdown below $21.98, many had seen $22 as a critical level, however silver follows gold to a large extent and so you may wish to keep your eye on the yellow metal. This morning the gold/silver ratio was 63.5, retreating from last week’s 2-1/2 year high of 64.

In this week’s Social Gold Mine we have a variety of tweets covering everything from the first Bitcoin Baby to the bursting of the bond bubble. There’s no Best of the Web today as we’ve produced our list of the Top 5 silver Commentators, we’d love to hear your thoughts on it.