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Indian gold imports surge as Reserve Bank eases restrictions

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India’s gold imports

We’ve already looked at China’s gold import data. Data on India’s gold imports can also give you a solid idea about the direction gold demand is taking in the Asian market.

Historically, India has been the number-one gold consumer. Recently, however, China took over that position. India still accounts for ~25% of total gold demand, making it very important to track.

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India’s demand for gold

The value data for India’s gold imports are reported every month by the Reserve Bank of India (or RBI). These data show India’s demand for gold. India imports ~90% of the gold it consumes. It’s the major component of India’s trade deficit.

Imports jump in January

In January, Indian gold imports climbed 55% year-over-year to 57.2 tons, from 39 tons in December. This is low compared to the 152 tons India imported in November. In value terms, imports came in at $1,558.4 million. This is a jump of 8.1% year-over-year and 15.9% month-over-month. This comes on the heels of easing import restrictions by the Reserve Bank of India.

Higher imports by India and China have helped support gold prices in the past. Any sustained strength in gold demand should be positive for gold prices (GLD) and gold stocks such as Goldcorp (GG), Barrick Gold (ABX), Newmont Mining (NEM), Kinross Gold (KGC), and Yamana Gold (AUY). It also affects ETFs such as the VanEck Vectors Gold Miners ETF (GDX) that invest in these stocks. These stocks make up 32.7% of GDX holdings.

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