By Daniela Cambone of Kitco News
Monday January 09, 2017 12:58
(Kitco News) - Circulating reports suggest India, one of the world’s top consuming gold-nations, saw one of its bleakest years on record in 2016, with shipments into the country reportedly dropping by 46% last month -- totaling just 56.9 tonnes, as compared to the 106 tonnes Indian buyers brought in during December 2015.
According to data compiled by Bloomberg, gold imports totaled 570.8 tonnes in 2016, down 44% from 2015.
“[T]he situation in India continues to be problematic,” said market watcher and publisher of The Gartman letter, Dennis Gartman. “[T]he liquidity that the Modi government had promised following its currency “conversion” scheme has not yet appeared. Eventually the new currency denominations promised by the government will be fully available, but until then India’s citizens are living in a relatively “cashless” environment when “cash” has always been the preferred method of doing day-to-day business,” he explained in his Monday edition of the newsletter.
“As a result gold buying on the part of India, the most important gold buying nation in the world, has remained subdued at best,” he said.
That said, Gartman noted that the yellow metal is still performing relatively well. “In that light, gold has held on quite well and we are left to wonder how strong it shall be when India returns in full regalia?” he questioned.
In December, it was reported that India, the world’s second-biggest consumer of gold, was considering cutting the import tax to 6% from 10% on gold in order to curb smuggling.
Helping gold Monday, was a return of Brexit jitters. “Gold bounced overnight likely on British Prime Minister Theresa May’s somewhat aggressive remarks in relation to Britain’s ties with the EU. May made it clear that a partial withdrawal would not be on the table, which raised concerns that the Brexit negotiations may be more turbulent than first thought,” Kitco Metal’s global trading director, Peter Hug said in his morning commentary.
Also moving gold positively, has been news of upbeat demand coming out of the world’s top gold nation, China. According to reports gold purchases are on the rise ahead of the Chinese Lunar New Year celebrations, which this year starts at the end of the month.
Kitco gold currency charts show broad-based gains for the precious metal in currency markets. Gold is up more than 1.75% against the British pound. The yellow metal is up 0.53% against the euro. In North America gold is up 0.81% against the U.S. dollar and 0.61% against the Canadian dollar.
