Home > Uncategorized > Gold supplies restricted to India – Action replay?

Gold supplies restricted to India – Action replay?


Foreign banks cut down gold supply to India- Bullion-Markets-The Economic Times

With the credit crisis having a direct impact on funding costs and drying up of interbank credit lines, a few foreign banks have altogether s

topped supplies of gold to Indian banks in a bid to reduce their exposure to Asian markets.

This comes at a time when global liquidity pressures have eased considerably and local demand for the yellow metal has picked up as prices have come off the highs witnessed in the early part of October. Dealers from many banks told ET that supplies have been squeezed with banks, such as Standard Bank of South Africa, one of the main suppliers, Commerzbank and UBS, stopping supplies altogether or reducing them on a consignment basis.

“Both Commerzbank and Standard Bank have stopped supplies on a consignment basis to Indian banks since October, while UBS has reduced its exposure,” said a bullion dealer from a public sector bank.

When the world’s largest buyer reduces buying …

You get lower goldprices. And that is what has been happening in the last 1 month.

India has been denied gold supplies as per Indian market requirement for 100 out of the last 110 years. Bretton Woods could drag on for 30 years due to restrictions on gold purchase by Indians. Is this another attempt to restrict gold purchases by Indians?

The world must privatize gold reserves completely. That is one sure way to ensure that Governments do not have inordinate influence on the lives of citizens.

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  1. Galeo Rhinus
    November 5, 2008 at 4:50 pm

    This is interesting … however your logic is incomplete…

    Foreign banks reduce their supply of gold to India. Assuming that the demand is roughly the same… should the prices not have gone up?

    Unless something else is going on.

    What is it? Bullion has been difficult to lay hands on even in the US… yet prices are low.

    What’s the explanation?

    How about the gold that is missing is being replaced by fake bullion in the Gold ETF’s. The Gold ETF’s are supposed to carry physical gold for every gold order. The demand for Gold ETF’s has been very high… what if these funds are playing games with the physical? That could explain the missing bullion – yet unlimited “paper gold”

    India does not have these ETFs but if there are gold shortages globally – it will impact India as well.

    I expect some Gold ETF scam to unravel at some point… but by then they might

  2. November 6, 2008 at 8:23 am

    1. Sellers will need to sell gold anyway .. hence, possibly, gold prices are down.

    2. India does have gold ETFs for the last 1 year. Why would gold investors pay an ETF to carry physical gold? They may as well have physical possession of the gold themselves.

    3. Instead of fake gold in ETFs theory, the Edmund Safra incident, Yamashita Gold, The Ustashi Gold are possibly some answers. You can see some background to these very puzzling and intriguing stories in my various posts.

  3. Galeo Rhinus
    November 6, 2008 at 7:44 pm

    I stand corrected on Indian ETFs

    These are the physical amount of Gold that some of the ETFs supposedly have in their possession (date unknown)

    IAU – 54.14 ton
    ZGLD – 22.0 ton
    PHAU – 20 ton
    GOLDBEES (India) – unknown
    GOLDSHARE (India) – unknown
    GETF – not backed by physical gold – but gold linked bonds

    their vaults are supposed to have over a 100 ton of gold. It is likely that the US government might start an “oversight” of these ETFs to “protect” the people from possible abuse. What if this “oversight” has already begun? Which includes transfer of bullion to new places – while the paper bullion continues to trade – until a point when one of these ETFS is unable to physically deliver gold… at which point the ETF’s collapse and then the government “officially” declares a gold policy?

  4. November 7, 2008 at 7:20 am

    Too much risk for too little gain. Trying to defraud the ETF.

    The Government can simply nationalize that in a welter of propaganda – which is what Roosevelt did.

    If you ask me, there is reputedly enough of Yamashita gold to buy all these ETFs about 20 times over. And Safra’s management of gold from the Sephardic Jews will make these ETFs look small.

  5. Galeo Rhinus
    November 7, 2008 at 11:38 pm

    which of your posts refers to these two sources?

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