Our sales have increased by 30-40 per cent over the last week following a decline in gold prices. Given that the current price level will continue, we see this season as one of the best festive seasons in terms of jewellery sales in recent years,” said Rajesh Mehta, managing director, Rajesh Exports, one of the largest jewellery retailers in India. – LINK, as sourced from John Brimelow’s “Gold Jottings”
I say “unofficial” bottom to this 9-week manipulated take-down in the price of gold because we don’t know to what extent the western Central Banks will throw paper at the NY and London gold “markets.” But based on the latest Commitment of Traders report, the bullion banks are covering their shorts fairly aggressively while the moronic hedge funds dump their longs and try to chase the market lower by piling in to the short side. This hasalways been a recipe for at least short term move higher in the metals.
But the cartel’s takedown of the paper gold price has created a nice ex-import duty premium bid in the Indian gold market just ahead of India’s festival season: “Dropping of the rates depend on the international market. If it continues, we are sure to have a bumper Diwali this year,” said N Anantha Padmanabhan, regional chairman, All India Gems and Jewellery Federation – LINK.
Please note that a sudden surge in legal kilo bar imports will not depress dore bar importation or smuggling, the latter of which is now estimated to fill about 30% of India’s annual gold demand now.