Indian Bears Confront Gold Bears Again

Source:

...Late last week, reported Indian premiums became huge. LeMetropoleCafe noted: "With the exception of the late August/early September period this year, premiums like this have never been seen since the Indian gold trade was liberalized in the late 1990s."

...Traditionally, this site has laid heavy emphasis on the role of India, by far the world's largest bullion importer, judging the state of Indian demand by the premiums to world gold shown in the domestic Indian gold market. It's worked well in the post-2000 gold run-up and has even caught recent rallies.

Late last week, reported Indian premiums became huge. LeMetropoleCafe noted: "With the exception of the late August/early September period this year, premiums like this have never been seen since the Indian gold trade was liberalized in the late 1990s."

The Indian currency, the rupee, has slumped 10% this month. Le Metropole Cafe says that is why the premiums that appeared in late August at $800 did not reappear until gold reached the low $700s last week.

This past weekend, the indefatigable Murphy posted a couple of recent Indian newspaper stories documenting the recent demand surge for physical gold. His conclusion: "Unless the rupee collapses, pushing world gold down further will be extremely difficult."...

Related Articles

Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe