India / China Gold Markets Moving In Opposite Directions

India / China Gold Markets Moving In Opposite Directions by Rory for The Daily Coin

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We should be reporting how the Indian gold market is filled with hustle and bustle due to the annual wedding season. This year the gold market, at least the above board gold market, is moving to the tune of coronavirus instead of traditional Indian wedding tunes.

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According to one report India’s gold demand is currently on par for a three decade low! That’s a lot of gold and I don’t think the smugglers will be able to impact that steep a drop.

“We have never seen such kind of demand destruction happening. Sales are zero during the lockdown,” N Anantha Padmanaban chairman of the All India Gem and Jewellery Domestic Council told Reuters.

He said India’s gold consumption in 2020 could fall to 350 tonnes to 400 tonnes, the lowest since 1991, and down from 690.4 tonnes in 2019. Source

Weddings, festivals and religious celebrations have all been shut down or postponed until later in the fall. India is expected to remain on martial law until May 3. The question remains for India and the rest of the world – will it return to business as usual?

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Meanwhile in China we see the exact opposite taking place. Physical gold demand was higher, but below demand for the same time in 2019. If you look at the chart you will see there was a distinct downward trend that broke just before coronavirus shut everything down.

Au(T+D) trading volumes in March set a new record, reaching 3,935 tonnes at an average of $9 billion per day, its highest ever level. Safe haven demand amid sell-offs in Chinese stock and commodity markets following covid-19 outbreak globally was the main contributor fueling the high trading volumes, the Council said.

Au9999 trading volumes – usually seen as a proxy for physical gold demand in general – and gold withdrawals from Shanghai Gold Exchange (SGE) both saw notable rebounds in March as most Chinese companies resumed operations.

The Council noted that despite the elevated trading activities, these figures are still below the levels seen in 2019.

Source

From all indications the demand for gold will continue to rise in China. Our guess is as soon as the Indian people are released from their house arrest gold sales will sky rocket.

So, while the two largest gold markets in the world are currently moving in opposite directions don’t look for this trend to continue. Gold will continue to be acquired in both nations as part of their cultural heritage, but there will be a secondary reason for acquiring more and more gold during the remainder of 2020 – out of control global money printing. The debasement of currency is not limited to the U.S or Europe and the Chinese and Indians know this already. Look for gold sales to spike higher as soon as the Indian government releases the people.

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Rory Hall, The Daily Coin and Gospel News Network. Beginning in 1987 Rory has written over 1,400 articles and produced more than 500 videos on topics ranging from the precious metals market, economic and monetary policies, preparedness as well as geopolitical events. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver, Gold Seek, SGTReport, and a great many more. Rory was a producer and daily contributor at SGTReport between 2012 and 2014. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Dr. Warren Coates and Peter Schiff, to name but a few. Don't forget to visit The Daily Coin and Gospel News Network to enjoy some of the best economic, precious metals, geopolitical and preparedness news from around the world.