• 4 minutes Energy Armageddon
  • 6 minutes "How to Calculate Your Individual ESG Score to ensure that your Digital ID 'benefits' and money are accessible"
  • 12 minutes "Europe’s Energy Crisis Has Ended Its Era Of Abundance" by Irina Slav
  • 30 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 4 hours Is Europe heading for winter of discontent with extensive gas shortages?
  • 2 days Wind droughts
  • 6 days "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 14 hours Kazakhstan Is Defying Russia and Has the Support of China. China is Using Russia's Weakness to Expand Its Own Influence.
  • 9 hours ""Green" Energy Is a Scam. It Isn't MEANT to Work." - By James Corbett of The Corbett Report
  • 4 days Oil Prices Fall After Fed Raises Rates
  • 5 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 12 days "Russian oil executive and Putin critic Ravil Maganov dead after mysterious six-story fall" - The New York Post
  • 3 days 87,000 new IRS agents, higher taxes, and a massive green energy slush fund... "Here Are The Winners And Losers In The 'Inflation Reduction Act'"-ZeroHedge
  • 9 days Beware the Left's 'Degrowth' Movement (i.e. why Covid-19 is Good)
  • 11 days The Federal Reserve and Money...Aspects which are not widely known
  • 13 days How Far Have We Really Gotten With Alternative Energy

Breaking News:

Gasoline Draw Sends Oil Prices Higher

G7 Targets Russian Gold In Latest Blow To Moscow

G7 Targets Russian Gold In Latest Blow To Moscow

The Biden administration and the…

Gold Remains Relatively Cheap, Here’s Why

Gold Remains Relatively Cheap, Here’s Why

Gold has been weakening against…

Gold Set To Soar As Inflation Fears Mount

Gold Set To Soar As Inflation Fears Mount

Inflation has been at the…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

Weak Indian Demand May Soon Impact Gold Prices

Incredible numbers this week on gold demand. Coming out of a nation that’s supposed to be the world’s top consumer — but is showing hardly any buying right now.

India.

Preliminary reports suggest that May was another very weak month for India’s gold demand. With Bloomberg citing familiar persons in the finance ministry as saying that May’s gold imports totaled just 31 tonnes — a drop of 51 percent from year-ago levels.

That would come after India’s gold imports dropped 67 percent in April — to just 22 tonnes. Showing that gold buying is incredibly sluggish right now.

In fact, sources in India’s jewelry sector were quoted as saying that there is “hardly any demand” right now in this key consuming nation. A fact that seems incredible in light of the recent strength in the gold price.

But in fact, it may be exactly because of gold’s strength that India’s consumers are staying away.

I have to thank long-time reader Tim here for recent discussions. With his experience at the heart of London’s gold industry shedding some critical insight on today’s market action in India — and beyond.

As he pointed out, gold demand in Asia’s big consuming nations like India and China has historically always tapered off when gold prices rise. With buyers here unwilling to pay higher rates — instead choosing to wait to see if prices settle back. Related: Grid Outages Are History With This Texan Innovation

Price rises in gold therefore, are not generally caused by such physical buying. But rather by investment demand from the financial sector — with that group of buyers driving up prices during times when gold is viewed as a needed hedge against risk.

In effect, bankers set the gold price — while buyers in places like India set the floor. That is, they will buy gold on any significant dips in price, keeping the metal supported at a certain level.

The really interesting thing however, is that India’s buyers must eventually return to the market. With such consumers traditionally throwing in the towel if prices stay high for a year or so — at which point they give up hopes for a drop, and wade back into the market.

All of which suggests that the current weakness in India’s buying could turn to strength — if we see gold stay near current levels through the rest of 2016. Watch for trading action over the coming months, and for a potential uptick in India’s buying toward the end of the year.

Here’s to picking your moments

By Dave Forest

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • TomGold on July 04 2016 said:
    That prediction was wrong on several levels.
    Turned out India and other countries just kept the gold accumulation on the quite.
    Gold continued to climb.
    Now with the likelihood that Japan's currency may fail, as its largest retirement fund is now failing, gold prices in countries outside the US is soaring. Gold is much better than a negative bond rate.
    Gold and gold mining surpassed Wall Street in 2016.
    Silver.... is much higher.

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News