• 30 mins Oil Production Cuts Taking A Toll On Russia’s Economy
  • 3 hours Aramco In Talks With Chinese Petrochemical Producers
  • 4 hours Federal Judge Grants Go-Ahead On Keystone XL Lawsuit
  • 5 hours Maduro Names Chavez’ Cousin As Citgo Boss
  • 12 hours Bidding Action Heats Up In UK’s Continental Shelf
  • 17 hours Keystone Pipeline Restart Still Unknown
  • 21 hours UK Offers North Sea Oil Producers Tax Relief To Boost Investment
  • 23 hours Iraq Wants To Build Gas Pipeline To Kuwait In Blow To Shell
  • 1 day Trader Trafigura Raises Share Of Oil Purchases From State Firms
  • 1 day German Energy Group Uniper Rejects $9B Finnish Takeover Bid
  • 1 day Total Could Lose Big If It Pulls Out Of South Pars Deal
  • 1 day Dakota Watchdog Warns It Could Revoke Keystone XL Approval
  • 2 days Oil Prices Rise After API Reports Major Crude Draw
  • 2 days Citgo President And 5 VPs Arrested On Embezzlement Charges
  • 2 days Gazprom Speaks Out Against OPEC Production Cut Extension
  • 2 days Statoil Looks To Lighter Oil To Boost Profitability
  • 2 days Oil Billionaire Becomes Wind Energy’s Top Influencer
  • 2 days Transneft Warns Urals Oil Quality Reaching Critical Levels
  • 2 days Whitefish Energy Suspends Work In Puerto Rico
  • 2 days U.S. Authorities Arrest Two On Major Energy Corruption Scheme
  • 3 days Thanksgiving Gas Prices At 3-Year High
  • 3 days Iraq’s Giant Majnoon Oilfield Attracts Attention Of Supermajors
  • 3 days South Iraq Oil Exports Close To Record High To Offset Kirkuk Drop
  • 3 days Iraqi Forces Find Mass Graves In Oil Wells Near Kirkuk
  • 3 days Chevron Joint Venture Signs $1.7B Oil, Gas Deal In Nigeria
  • 3 days Iraq Steps In To Offset Falling Venezuela Oil Production
  • 3 days ConocoPhillips Sets Price Ceiling For New Projects
  • 6 days Shell Oil Trading Head Steps Down After 29 Years
  • 6 days Higher Oil Prices Reduce North American Oil Bankruptcies
  • 6 days Statoil To Boost Exploration Drilling Offshore Norway In 2018
  • 6 days $1.6 Billion Canadian-US Hydropower Project Approved
  • 6 days Venezuela Officially In Default
  • 6 days Iran Prepares To Export LNG To Boost Trade Relations
  • 6 days Keystone Pipeline Leaks 5,000 Barrels Into Farmland
  • 6 days Saudi Oil Minister: Markets Will Not Rebalance By March
  • 7 days Obscure Dutch Firm Wins Venezuelan Oil Block As Debt Tensions Mount
  • 7 days Rosneft Announces Completion Of World’s Longest Well
  • 7 days Ecuador Won’t Ask Exemption From OPEC Oil Production Cuts
  • 7 days Norway’s $1 Trillion Wealth Fund Proposes To Ditch Oil Stocks
  • 7 days Ecuador Seeks To Clear Schlumberger Debt By End-November
Alt Text

Will Ecuador’s Mining Sector Return To Its Golden Days?

Despite the recent political problems…

Alt Text

Copper Prices Ignited By Chinese Demand Growth

Copper prices saw some gains…

Gold Prices Under Pressure As Indian Demand Plunges

Gold Prices Under Pressure As Indian Demand Plunges

Last week, I talked about big changes afoot in the world’s top gold-consuming nation, India. With the government there imposing a surprise sales tax on gold, in an apparent attempt to further curb demand.

And the last few days, things got a lot more serious for the gold market in this critical locale.

One of the immediate effects of the 1% sales tax announced on February 29 was a massive outcry from India’s jewellers. Who launched a full-scale strike on March 2 to protest the levy. Related: Why Saudi Arabia Has No Intention To End The Oil Glut

That work action has reportedly brought gold sales in the country to a standstill. With one professional in the Indian refining industry telling Platts on Tuesday that there is “no buying anywhere” across the nation.

But reports emerged the last couple days suggesting that jewellers were ready to make a compromise with the government in order to get back to work. And late Tuesday, such a strategy was indeed confirmed by the head of India’s Gems and Jewellery Trade Federation.

And it could be the biggest news to hit the gold market in decades. Related: Exposing The Oil Glut: Where Are The 550 Million Missing Barrels?!

The Jewellery Federation director Ashok Minawalla told local press that India’s jewellers have offered to stop selling gold bullion directly to consumers. A practice that up until now has been common — with gold buyers often picking up gold bars from jewellers as investment holdings.

The following is a direct quote from India’s Hindustan Times on what a halt to bullion sales could mean for the gold market:

“The move will likely affect almost a quarter of [jewellers’] overall sales, while also reducing gold imports, which had earlier been driven due to a surge in purchases. Related: Nigerian Pipeline Bombed, Knocking Off 300,000 Barrels Per Day

More than 250 to 300 tonnes of the total 900 tonnes of gold annually imported by jewellers, is bought into the country in the form of bullion bars of 100 gm each.”

This suggests that the decision from the jewellery federation could cut demand by up to 300 tonnes, or 9.65 million ounces, annually. A figure that would equate to 7.1 percent of total global demand from 2015.

The effect this could have on the gold price is difficult to overstate. In short, this could be one of the biggest threats the gold market has seen in years. Watch for more announcements on whether India’s jewellers will indeed implement this unprecedented policy.

Here’s to getting ready

By Dave Forest

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • presk eel pundit on March 10 2016 said:
    “The move will likely affect almost a quarter of [jewellers’] overall sales..."

    Indian jewelers are willingly giving up a quarter of their sales? I'll believe that when I see it!

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News