By Geena Paul
MUMBAI: In February and March, newspapers across the world splashed reports that India’s gold import has come down to zero.

This trend has sent shockwaves across the bullion markets as India has been traditionally the biggest importer of the yellow metal. Even the marriage season did not help much to lift the sales. In fact, across India, jewellery sales came down drastically. And, one thing which was going up was the sales of gold scrap.

Can you imagine a country which used to import gold substantially, exporting the yellow metal? Yes, that is what happened in the case of Turkey, which has been the second gold importer in the world, started shipping gold in 2009. Reason: Scrap sales in the country shot up unprecedentedly.

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In the case of Indians, who have an emotional attachment to gold jewellery, they don’t sell their gold until it is absolutely necessary. They sell it only when their daughters get married or to buy land or somebody is hospitalised with serious illness. So, the present trend shows that Indians are also hit badly by the recession and they are selling their gold to tide over the crisis.

Another factor is that some people are making a profit by selling their old gold, prices of which have shot up big way during the past one year.

Still, profit taking is not the only reason for Indians to sell gold. Job cuts by several companies and other hardships of the recession is slowly pinching Indians now.

The gold scrap sales have down another balancing act also. Following the increased arrivals of gold scrap, it has balanced the rising demand for the metals from investors, who sought some safe haven to park their money. Gold’s safe haven status is the highest now following the global meltdown. This has helped stagnate the gold prices at $900-$950 per ounce.

In fact, when the West, which scurrying to foolproof their money from the recession impact, is buying gold in tonnes, Middle East and Asian nations are selling scrap to make a killing from the soaring prices of the yellow metal.

Turkey has become an important net exporter in the first quarter. Vietnam, usually a large buyer, and Thailand are also exporting gold now.

According to media reports, Asian countries exported about 70 tonnes of gold a month in the first quarter of the year, equal to about 40 per cent of the world’s monthly mine supply. Normally, Asia is a net importer of gold.

Mumbai has been exporting gold to Dubai and Zurich, reversing the traditional bullion flow. The surge in scrap has driven local gold prices in Asia to a discount against the London benchmark.