If and when mining starts there is a willing buyer iun India. There 2008 imports probably wont be as high bit wait until their markets get used to the current prices and you will probably see a large import begginning toward the end of 2008 providing yet again another physical floor underpinning the gold price:
NEW DELHI: What is it between Indians and gold that the craving just goes on and on. Since India does not have significant domestic production of the yellow metal, this craving has to be satisfied by imports. In 2007, official gold imports touched an all time high of about 800 tonnes, according to the World Gold Council. This is an increase of nearly 50% since 2000. India has the distinction of having the world's largest private hoard of gold that kept at home, estimated at anything between 15,000 tonnes to 40,000 tonnes. This is in the form of privately-owned jewellery and ornaments collected by millions of households across the country. In any one year, a small number of households actually buy precious jewellery and ornaments — about 5.6 million in urban areas and 16.4 million in rural areas, according to the National Sample Survey Organisations consumer expenditure survey. And, there is a lot of recycling taking place as some people sell and others buy. Trade estimates put recycling at about 200 tonnes per annum. According to recently released Gold Survey 2008, carried out by the international gold consultancy GFMS, total gold stocks in the world are estimated at 161,000 tonnes. Of this, 52% is in the form of jewellery, 18% is official holding by governments, 16% is private investment, 12% is involved in fabrication and about 2% is unaccounted or lost. In international trade circles, the mammoth Indian market is also well known to be highly price sensitive. As international gold prices rose steeply from $672 per ounce in September 2007 to about $833 per ounce by December end, Indian imports slumped to 93 tonnes, a mere 12% of the year's total imports. In 2006, the last quarter had seen import of nearly 247 tonnes of gold. As prices have continued to rise in 2008, demand has further slowed down. According to latest reports, gold imports in March this year were half of what they were last year. Prices may temper the Indian lust for gold, but they don't kill it. In the last eight years, global gold prices rose over 245%, from $268.3 per ounce in January 2001 to $927.75 per ounce, including the all time record of $1006.75 per ounce on March 18 this year. But, it is only since the last quarter of 2007 that Indian demand has started flagging. Except for the two years when monsoon failures led to bad harvests during 2002-2004, the country's gold imports have been steadily rising. So, why are gold prices in the stratosphere? In the world of gold, several changes have taken place in the past year. For the first time since 1905, China overtook South Africa to become the world's largest producer of gold. The ancient mines of South Africa and Australia are wearing thin, just as US mines of 19th century gave up in 20th century. Global production dipped in 2007 by 10 tonnes, about 0.4%, according to Gold Survey. This pushed production to 11-year low, and contributed to rising prices. Most of this decline came from Peru, US and South Africa. The same trend is expected to continue in 2008. But the boom in gold prices is not a demand-supply issue. The main factors are the economic downturn in US and weakening of the dollar. var RN = new String (Math.random()); var RNS = RN.substring (2,11); var b2 = ' '; if (doweshowbellyad==1) bellyad.innerHTML = b2;
