Regular readers of The Gold Enthusiast know we closely watch the Indian gold market. That only makes sense, as India has one of the top 2 retail gold markets in the world, so it represents a significant chunk of the world’s gold demand. Most recently, we took a peek at the mindset of buyers and sellers at the famous Zaveri bazaar.
Today we see the first year-end numbers coming out of India for 2017, and they look good. Extremely good, in fact. You may recall the demonetization of the 500 and 1000 rupee notes in late 2017, and the questions of whether the gold market would take a huge hit.
The last read was that there might be a gray market growing, and that retail sales were a bit weak. Today, we learn that gold imports into India were up 67% in 2017 to 855 tonnes, smashing expectations. This is being attributed to jewelers replenishing their stocks, as they better understood gold demand.
What this Gold Enthusiast suspects is that the gold trade has adjusted to its new environment, and we’ll see similar total consumption overall but distributed through slightly different channels, as buyers get used to using credit and non-cash money sources. Hopefully, we’ll see a good report on this by the end of January. You can read about the 2017 import figure news release here.