Short but very important note this week. From one of the world's most critical gold-consuming nations.
That's India. Where top finance officials met yesterday to discuss the state of gold imports into the country--and potential new rules for this market.
Local press reported that representatives from India's Commerce and Finance Ministry, as well as from the country's Reserve Bank, met because of concerns over rising gold imports. With a spike in imports during the September festive season leading to worries over India's growing current account deficit.
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Officials are therefore expected to discuss possible new curbs on gold imports. Including the re-introduction of the so-called 80:20 scheme--where gold importers are required to re-export 20% of the supply they bring into the country.
The 80:20 rule was originally imposed in July 2013. And led to a major fall in gold imports across India--and a significant reduction in overall global gold demand.
The government did away with the 80:20 rule this past May. Leading some observers to speculate that India could return to the gold market as a major buyer, helping to lift prices.
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Indian officials however, have been cautious in allowing complete freedom for imports. With some import curbs such as higher duties still remaining in place.
If the 80:20 scheme is re-introduced, it could cause a further reduction in buying here. Acting as a drag on the market, and possibly affecting prices.
Watch for news from local Indian press on any decisions to come out of yesterday's meetings--and any new official policies on changes to gold import rules.
Here's to keeping your head up,
Dave Forest
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Dave is Managing Geologist of the Pierce Points Daily E-Letter. More