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PRESS
RELEASE
19 January
1998
Surge in Indian Gold Demand
DUBAI: 19 January 1998 - Demand for gold in India, the world's largest
gold-consuming country, reached 737 tonnes in 1997, an increase of 229
tonnes or 45% over 1996 and a new all-time high.
Fueling this demand, official imports of 527 tonnes were up 88% over
1996 and accounted for 72% of overall demand, signalling that the government's
recent gold market deregulation moves had displaced large quantities of
unofficial imports.
Aside from Indian consumers' affinity for gold, a number of factors have
driven demand to new highs:
1. More readily available supplies of gold in India:
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From January 1st, 1997, non-resident Indians (NRI's) were permitted
to import 10kg of gold every 6-months compared to 5kg previously.
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From October 21st, the Indian authorities allowed authorised agencies
to import gold under "Open General License". This meant
that 11 authorised agencies could import gold without limitation on
quantity and sell it to the local market against rupees after payment
of approximately 5% import duty, also payable in rupees.
2. Lower domestic gold prices resulting from:
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The lower international gold price;
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The narrowing of the domestic price premium vs the international
price from 15% to 9% in December 1997 because official foreign exchange
was readily available, Special Import Licenses no longer needed to
be bought and competition among supplying banks was intensifying.
3. The tenth consecutive good monsoon.
Based on the lasting benefits flowing from gold market structural reforms
and the continuing depressed gold price, latest reports indicate that
demand is consolidating at the current high levels.
These encouraging results from India are being released to the media
today. They will also be included along with full year demand figures
in issue No. 22 of Gold Demand Trends to be published February
25th.
Contacts and related links:
Rolf W. Schneebeli, World Gold Council, Dubai
Tel. +971.4.314.500, Fax. +971.4.315.514,
E-mail: wgcdubai@emirates.net.ae.
News Flash (30 October 1997): DIWALI - India's
Festival of Lights -
Spotlight on Gold
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