The final 2016 stats are in from the world's top gold-consuming nation, India. Showing that the past year was one of the bleakest on record for this critical bullion market.
Local press quoted familiar persons as saying that India closed out 2016 with a very weak December gold market. During that month, shipments into the country reportedly dropped by 46 percent - totaling just 56.9 tonnes, as compared to the 106 tonnes Indian buyers brought in during December 2015.
That brought calculated imports for the past year to a grand total of 570.8 tonnes. Marking a 44 percent decline from import levels seen for 2015.
There were a variety of reasons for the big fall in imports this past year. Including a six-week jewellers strike early in the year that paralyzed gold sales.
More recently, gold demand has been dented by the Indian government's campaign to reduce cash circulating in the country. A move that was finalized in late November, and likely was an important driver of lower demand during December.
Sources in India said that national demonetization is likely to be substantial drag on gold demand for the foreseeable future. With one Mumbai-based commodities specialist noting, "The physical demand aspects will be completely bad for 2017. For the first time Indians will be trying to buy gold cashless. That's a big challenge."
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In fact, insiders see India's gold imports hitting even lower levels this year. With Rajesh Khosla, managing director of India's biggest bullion refiner MMTC-PAMP, telling the press that he sees imports at 400 to 500 tonnes yearly going forward.
That would be a substantial drop even from this year's already-low levels. Which begs the question: how would a prolonged reduction in Indian demand affect the gold price?
As I've noted in the past, Indian buying doesn't generally have an immediate effect on global exchange prices. But if a drop in demand on the scale forecast above does appear, it would certainly represent a long-term weight on the market.
This is going to be a critical year for India and gold. Watch for ongoing figures on imports into this key market, to see if shipments are tapering off the way industry experts predict.
Here's to getting physical.
By Dave Forest
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Dave is Managing Geologist of the Pierce Points Daily E-Letter. More