Despite a spike in COVID cases and rising prices that dampened retail demand for gold in India, imports in April came in above the 10-year monthly average indicating a continued recovery in the Indian gold market.
India imported 110 tons of gold in April. That’s 71% above the 10-year monthly average and compares with just .o5 ton in April 2020.
China and India rank one-two in global gold consumption, and through the first quarter of 2021, gold demand charted an impressive rebound in both countries.
China’s year-on-year gold consumption surged 93.9% as first-quarter demand rebounded to pre-pandemic levels. Meanwhile, official Indian gold imports hit the highest level in a decade in March.
There’s been some chatter in the financial media about the decline of the gold market. Gold is a relic of the past and crypto will replace it as the go-to safe haven and inflation hedge, according to some. But as host Mike Maharrey explains in this episode of the Friday Gold Wrap podcast, the demise of the gold market is greatly exaggerated. A lot of people still want gold. Mike also touches on the national debt in this episode. It’s even worse than most people think.
China has opened the door to billions of dollars in gold imports.
Reuters cites five sources indicating that Beijing has greenlighted the import of 150 tons of gold valued at around $8.5 billion at current prices. The report notes that China’s sudden appetite for gold could potentially “support global prices.”
The bounceback in the Indian gold market continued last month.
Indian gold imports hit a 21-month high in February and there was robust retail demand.
This comes on the heels of a 72% year-on-year increase in gold imports in January.
Some policy shifts recently announced by the Indian government in its Union Budget will likely have a positive impact on the country’s gold market. India ranks as the second-largest gold-consuming country in the world, second only behind China.
The three key policy changes that will likely affect the gold market are:
Last month, we reported on signs of revival in the Indian gold market. Gold imports hit a 19-month high in December.
That revival has continued into 2021. Gold imports in January were up 72% year-on-year, and some shifts in government policy could give demand another shot in the arm.
India ranks as the second-largest gold consuming country in the world, second only behind China. But over the last couple of years, the gold market in India has languished due to a combination of record-high gold prices in rupee terms and the economic impacts of the coronavirus pandemic. But were signs of revival in the Indian gold market last month.
Gold has helped Indians weather the economic storm caused by the coronavirus pandemic.
The government response to COVID-19 has ravaged the Indian economy. As a result, many banks are reluctant to extend credit due to fear of defaults. In this tight lending environment, many Indians are using their stashes of gold to secure loans.
The silver market in India has enjoyed massive growth over the last several years. Demand for the white metal has increased from around 3,000 to 6,000
tons over the last five years, according to Chirag Thakkar, CEO of the Indian bullion company Amrapali Gujarat.
The Silver Institute interviewed Thakkar for the latest edition of Silver News.
