Page 7 - Bullion World Volume 4 Issue 10 October 2024

Bullion World | Volume 4 | Issue 10 | October 2024

Switzerland has emerged as the leading source of
gold imports for India, accounting for approximately
EDITORIAL 40% of the total imports. Following closely are the
UAE and South Africa, contributing over 16% and
about 10% respectively. The significance of gold
in India’s import portfolio is stark, as it constitutes
more than 5% of the country’s total imports.
Dear Readers
India is pursuing a reassessment of specific clauses
Between July and September 2024, gold prices within the free trade agreement with the UAE, which
increased by 13.3% in USD terms at the world became effective on May 1, 2022. This review is
market. During the same period, gold in INR terms particularly important, as the industry expressed
increased only by 5.6%, thanks largely to the steep significant concerns regarding the surge in precious
cut in import duty announced on July 23, 2024. A metal imports from the UAE facilitated by the trade
temporary fall in the price of gold during the last deal.
week of July provided an opportunity for retail
investors to add more gold at lower prices. Market In recent months, silver has attracted significant
participants believed that lower duties would attention from investors, largely due to its strong
formalise the trade and also curb smuggling. performance relative to gold. In the last quarter,
silver-backed ETFs saw inflows of close to 829 tons,
A proxy indicator for the extent of smuggling is marking the highest quarterly inflow since early
the level of discount in local market price vis-à-vis 2021, when holdings were at their peak. Year-to-
synthetic gold price computed taking London spot date, silver prices have risen by 34.25 %, surpassing
price as the basis. It is interesting to note that the gold's increase of 29.50 %. This trend appears to be
discount in the Indian market reduced from around supported by solid fundamentals in the silver market.
0.9% level (an average of two months prior to the
announcement of the duty cut) to 0.2% level in the Happy festival season
post-two-month window. Thus, there has been a
significant reduction in the discounts although it
has not been eliminated fully. With increased market Best wishes,
hygiene and stricter border controls, we hope we G Srivatsava
would soon reach a parity in prices. Editor

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