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To: ecrire who wrote (29321)	2/22/2013 2:13:35 PM
From: TheSlowLane	16 Recommendations Read Replies (1) \| Respond to of 29622

Yes everybody knows that it's over. The people who are braying it most loudly are the ones who never owned any gold at all and boy are they relieved. Now they can stop feeling like such arseholes for having missed it (for 12 years running) and now they can show everyone how smart they are by calling a top. Fortunately the market tends to have a special reward for just such hubris.

To: ecrire who wrote (29321)

2/22/2013 5:12:38 PM

From: diddlysquatz

1 Recommendation Respond to of 29622

Indians buy gold on weakness. They are some of the sharpest gold traders in the world. Investment demand may and will likely wane but physical buying from China and India will likely increase on weakness.

Retail consumers drive gold demand in India

Dilip Kumar Jha | Mumbai February 19, 2013 Last Updated at 17:08 IST

Government measures to curb gold import ineffective so far, India’s gold import to remain between 850-950 tonnes in future

http://www.business-standard.com/article/markets/retail-consumers-drive-gold-demand-in-india-113021900451_1.html

Retail consumers’ unabated appetite to own an additional piece of gold, has so far nullified the government’s efforts to curb its import in order to control the burgeoning current account deficit (CAD). Consequently, India’s gold demand unexpectedly shot up 41% in the fourth quarter of 2012.

The World Gold Council (WGC) data showed India’s gold demand at 262 tonnes in the last quarter of 2012 compared with 185.5 tonnes in the corresponding period last year. Despite the government four-fold increase in customs duty to discourage gold imports, its arrival into the country saw a minuscule 12% decline at 864.2 tonnes in the calendar year 2012 compared with 986.3 tonnes in the previous year.

“India’s gold demand is largely driven by a combination of both retail and urban consumers. While urban consumers are raising gold holding in proportion to their rise in income be it salaried or business class, continuous upward revision in minimum support price (MSP) of agri commodities left more investible surplus at the hands of farmers. Being gold the only next to food and shelter, this investible surplus is coming into gold from rural India,” said Umesh Parekh, Managing Director of Shree Ganesh Jewellery House Ltd.

In January 2011 when import duty on gold was prevailing at less than one percent, the government presumably thought that an increase in tax would make the precious metal costlier which would ultimately translate into an automatic reduction in consumers’ affection towards gold. Considering that, the government first doubled duty to 2% on January 17, 2011 which was further raised
to 4% in the Union Budget in March 2011.

“Retail consumer demand comprises around 75% of India’s overall gold demand, however, remained intact irrespective of gold import duty,” said Parekh.

Retail consumers buy gold jewellery for gifting to their kiths and kins especially on wedding and other such celebrations. Gifting gold jewellery to kids has become almost mandatory especially on the occasions of their wedding. Young and enthusiastic investors buy gold coins as a safety for future.

Apparently, jewellery demand in India shot up a staggering 34.8% to 153 tonnes in the fourth quarter of 2012 compared to 113.5 tonnes in the same quarter previous year. In the same period, however, investment demand also jumped over 51% to 108.9 tonnes from 72 tonnes.

“Indian consumers buy gold for safety against inflation. Since, inflation has been a major problem for average Indian households, they keep refuge in gold as a savior,” said Mehul Choksi, managing director of India’s largest branded jewellery producer and retailer.

Aspects worth considering
Tips	Precautions
Buy only branded products	Avoid intrinsic designs
Get ornaments tested and certified from a renowned and independent third party evaluator	Do not buy traditional ornaments from perennial jewellers
Pay through cheque	Ensure gold and stone content in region specific items
nsist on getting a receipt to ensure resale value	Do not trust the jeweller on verbal assurance
Ensure hallmarking	Do not buy resale branded jewellery from other than the brand house itself
Collect purity and weight certificates, read fine prints carefully	Avoid buying from unorganized sector retailers without proper sales tax and VAT registration numbers
Bifurcate gold portfolio between jewellery and coins in 75 and 25 ratio	Do not put investible surplus in one basket
Sell investment products first, in case of need	Do not mortgage gold jewellery for long term without equitable fund in sight
Keep gold holding in home and bank locker	Avoid storing in one place without a proper locker
Polish jewellery in every two years to give it an original look	Do not keep jewellery and certificates together

According to Choksi, gold demand would continue especially as a compulsory buying for wedding and other such opportunities in addition to its upbeat demand for auspicious occasions. The yellow metal’s appeal as a hedge against the worst economic time has also been driving its demand in India.

Consequently, gold’s import in the quarter ended March 31, 2013 is expected to remain around 200 tonnes of which around 100 tonnes already imported in January. Rising imports against exports widen the trade deficit resulting into proportionate increase in the CAD, a major concern for the government to address through various options including a curb on gold import. Jewellers, however, see the government measure as an encouragement to smugglers.

“Huge quantity of gold is coming into India through Singapore, Dubai, Nepal (with 2% import duty) and Bangladesh through smuggling where the government has no control. The increase in import duty has just added some additional money to the government’s kitty. Being the consumer-oriented products, its consumption cannot be stopped,” said Ashok Minawala, an industry veteran and ex-chairman of the apex domestic centric trade body All India Gems & Jewellery Trade Federation (GJF).

Gold import into India, therefore, is expected to remain between 850 and 950 tonnes irrespective of measures and aberrations, he added.