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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: lorne who wrote (6307)	1/19/1998 9:30:00 PM
From: lorne	Read Replies (1) \| Respond to of 116764

India seen as fastest growing gold market Tuesday 20 January 1998 By Sonny Abraham DUBAI: Demand for gold in India grew to a record high of 736.74 tonnes in 1997, compared to 507.76 tonnes in the previous year, the World Gold Council (WGC) announced here on Monday. ''India has not only maintained its status as the world's largest market for gold, but has also become the fastest growing market'', Mr Rolf Schneebeli, WGC chief executive for Middle East and India, said. He said Indian demand had grown by an ''astounding 45 per cent'' last year over the 1996 levels. According to WGC figures, India's official gold imports alone touched 526.45 tonnes, a sharp increase of 88 per cent. In fact, this figure was higher than the total demand for gold in the country in 1996. ''A combination of factors has led to this phenomenal growth in demand for gold in India'', Mr Schneebeli explained. ''Gold has been available at a bargain price for the last few months and that has made it an excellent buy for Indians who see it as a safety net''. ''India has also seen a rise in disposable incomes across the board and that has also helped in fuelling the demand for what Indians regard as a must-buy at any time'', he said. Apart from the official imports, the total demand in India also included 92 tonnes of ''other imports'' and 105 tonnes of recycled gold. Mr Schneebeli said Indians had better access to gold in 1997 than ever before, thanks to the various liberalisation measures taken by the Indian government. Early last year, the limit for non-resident Indians (NRIs) to carry gold into India was doubled from five kg to 10 kg. Then the government announced a list of banks and financial institutions who were allowed to import gold for sale in the Indian domestic market. ''This brought the premium on the international price of gold down from above 15 per cent to about 10 per cent'', he said. Mr Schneebeli said WGC, the marketing arm of the gold mining industry, had, at the gold economic conference in November, 1996, backed the liberalisation of gold markets. He pointed out that the Indian government would have gained some $300 million in import duties on gold last year. ''It is a win-win situation. The government has achieved higher import duty collection, the trade in India has better access to raw material and the consumer has paid a premium lower than what he has been used to in the past'', he said. ''The confidence in gold is unique not only to Indians, but we have also seen a manifestation of that emotion in the South-east Asian countries which have experienced a crash in their financial markets recently. People who held gold were better protected than those who did not'', Mr Schneebeli said. Dubai, which is the main source of gold for India, imported a total of 660.3 tonnes of gold bullion in 1997, an 88 per cent increase over the figure of 350.479 tonnes for the previous year. ''Dubai has benefited not only from India's demand growth but also from the growth in demand that other neighbouring markets recorded'', Mr Moaz Barakat, WGC's regional manager, planning, said. He said traders in Egypt, where import duties were brought down in 1997, were increasingly sourcing gold supplies from Dubai. Preliminary estimates suggest that the Egyptian gold market grew by about 40 per cent to around 100 tonnes last year. Mr D V Pathy, WGC's manager for Gulf states and business development, said that the liberalisation in India and elsewhere would only make Dubai's role more vibrant. Figures upto November, 1997, show that Dubai had outpaced Singapore by 56 per cent to emerge as the world's largest physical redistributor of gold. In 1996, Dubai missed the top ranking by a narrow margin, importing 350.479 tonnes against Singapore's 357.532 tonnes. ''What is interesting is that Dubai's growth has not necessarily been at the cost of Singapore. While Dubai grew, Singapore also recorded a growth of 16 per cent. This only proves that the market is not factoring the growth in physical demand when it comes to the price of gold'', he added. (UNI)