Interesting para there: "Such a sale would also dent international gold prices which took a hit earlier this year after Cyprus said it was considering selling its gold reserves to shore up its finances." After seeing the crazy world we live in, won't be surprised if this plan actually goes through.
New Delhi Gold price hit fresh all-time high of Rs 35,074 per ten grams in futures trade Wednesday on heavy buying as rupee plunged to its new record low of 68.85 against the US dollar. http://zeenews.india.com/business/b...l-time-high-of-rs-35-074-per-10-gm_82753.html
So how does buying gold off citizens and dumping more rupees into the market make the rupee any more valuable? LMAO, its devaluing for a reason people the citizens don't trust paper money. Slam
I would be highly suspicious if it was me. More likely as soon as you go to sell it the government will come up with some BS that the seller has obtained their gold illegally and therefore the government has the right to confiscate it. Tell 'em nothing!
Off topic but India could fly 67 tonnes to Europe in a hurry but it will take the US 7 years to deliver 300 tonnes to Germany
"Off topic but India could fly 67 tonnes to Europe in a hurry but it will take the US 7 years to deliver 300 tonnes to Germany" Simple explanation, India HAS the physical gold, America DOES NOT!
Well, I see the following possibilities, issues here: *if the Indian state starts buying gold from the people in ruppes, if could increase gold's price and shrink the rupee's price... *what if they would buy gold for dollars? (dollar price goes lower, gold higher!) *what if people don't want to sell? *finally, the Indian state itself is accumulating gold, just like China, Russia and Brazil - another "brick" of the BRICs So, bottom line is: India needs gold! Aren't they also trying to get rid of the dollar? I see more complex issues behind this... I think people should be allowed to set their own premiums and the state should pay the people how much they ask for their gold
The Indian Government has had an import duty on gold at 6%, (then 8%,then yesterday 10%!!), so the locals would want to recoup their 6% so I think the Banks will have to offer at least spot+6% to make the deal work. Less gold imported = less jewellery manufactured, = less employment, = less export dollars. Net benefit probably zero.
Indians are the world's biggest private hoarders of gold precisely because of what their government is now doing. Their inherited cultural history (passed down through families, generation to generation, by word of mouth) is stronger than any short term government edict. They will not relinquish their wealth.
So, I've been wondering what sent the Indian Rupee into a slide. There wasn't a clear story or issue I could put my finger onto the cause of this slide, other than the Indian Govt. was limiting Gold imports to address the worsening balance of payments. But it seems from this zero hedge article, that it was the gold trade itself that caused the current account imbalance. "$53.6 Billion of gold was imported by India last year." For a country that pretty much consumes most of what it makes, that would surely create a trade imbalance. http://www.zerohedge.com/news/2013-09-01/indias-holy-mary-converting-sacred-temple-gold-dollars But thumbs up to the Indian people for taking control of their lives. They obviously knew what the Govt. was doing (inflating the currency pool) and started exiting the Rupee and into real money.
