Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: goldsnow who wrote (29302)	3/3/1999 4:03:00 AM
From: Alex	Read Replies (3) \| Respond to of 116857

India's Scheme to Get Gold Deposits Put that "idle" gold to work A gold deposit scheme outlined in the latest Indian budget could bring into the banking system "idle" gold of up to 100 tonnes a year, according to early industry estimates. Under the proposed Gold Deposit Scheme, selected banks would be permitted for the first time to accept gold deposits - mostly jewellery and bullion held by individuals as a store of wealth - against which they would issue interest-bearing bonds. On maturity, the bonds could be redeemed for the weight of gold initially deposited. Yashwant Sinha, finance minister, announced the scheme in last week's budget as a measure to help cut India's high gold imports, with a broader eye on the rising pressure facing the country's external accounts. India is the world's biggest buyer of gold, officially importing 614m tonnes last year. The new scheme is also considered likely to herald further sophistication in India's domestic gold markets, encouraging banks to lend the metal and develop gold hedging instruments. Pravinshankar Pandya, chairman of the Gems & Jewellery Export Promotion Council in Bombay, said he believed the scheme could reap up to 100 tonnes of gold a year, against current annual demand of more than 800 tonnes. Gold demand, including both imports and recycled gold, rose 11 per cent last year. Mr Sinha gave no details of likely interest rates or tenures for the proposed bonds, but said they would be exempt from tax both on interest and capital gains. He also made no estimate as to how much gold the scheme might glean from Indians, who for generations have cherished the metal as a safe, portable store of wealth - notably in rural areas. He only said he was confident of bringing large quantities of such gold into the system through the banks. "Domestic demand, the demand from jewellers, this is something we could meet out of a gold stockpile that we'll be able to create," he said after the budget. Industry associations said the success of the scheme would depend entirely on the bonds' interest rates and the success of banks marketing the scheme. Many Indians, particularly in rural areas, hold gold and jewellery out of suspicion of financial institutions. There is no accurate figure on the amount of gold in the country, but estimates range between 8,000 and 15,000 tonnes. By way of some precedent, a one-off gold bond scheme launched by the Reserve Bank of India, the central bank, in 1993 attracted 41 tonnes of gold, based on a five-year bond bearing 2 per cent interest. However, the new scheme would differ by offering a continuous deposit service, while also forcing banks to earn from the recovered gold enough to service the interest payments. The latter is seen as encouraging gold lending to jewellery makers and eventually to the creation of hedging instruments and other gold-based financial products. India's gold and silver imports surged in official accounts from $936m during the first nine months of the last fiscal year to $3.3bn between April and November 1998, chiefly resulting from the government's decision in November 1997 to permit 11 financial institutions legally to import and retail the metal. However, concern over surging gold imports led the government to raise gold duties in January, a move criticised for reviving the smuggling of gold - the very thing the earlier decision to allow banks to import the metal was designed to curb. World Gold Council officials in Bombay say the rise in duty has already led to shrinking imports in gold centres such as Ahmedabad, western India, noting also a surge in imports to Nepal, where the duty is lower. The Financial Times, March 3, 1999

To: goldsnow who wrote (29302)	3/4/1999 5:44:00 PM
From: Alex	Read Replies (4) \| Respond to of 116857

<<Even the most senior wizards are at a loss today to explain the implications of the U.S. economy growing at 6 percent this last quarter while Asian and European financial bases continued to stagnate or contract. In ways not seen since the Great Depression, the world's financial elite is losing confidence in its prescriptive and analytical hold on global affairs. The public's confidence is not likely to be far behind -- especially if Japan's desperation tactics again fail.>> washingtonpost.com