“Gold smugglers run riot in India,” says Shivon Seth, writing on mineweb.com. This confirms that new regulations by the Central Bank of India have not dampened the buying of gold in the world’s second most populous country. Indian revenue authorities fear smuggling could rise to over 150% more than last year, Seth says.
A long-time client with family and friends in India recently emailed the below to me.
I’m just finishing up my trip to India. There is absolutely no fall in demand for gold, despite the 8% duty. Smuggling, apparently, is alive and flourishing, just as in the old days, and, just as I had expected. Do not heed the official figures.
Many gold analysts assert that the Central Bank of India succumbed to Fed pressures when it imposed the higher import duty. Numerous articles report huge Asian demand for gold since April when the final leg of the gold price smash was put in.
That the people of India willingly pay such high premiums for gold goes to show that when paper currencies become suspect, gold becomes the life boat. The renewed interest in gold in Asia should be of great concern to the gold bears that have taken short positions.