Last Updated :
05 June 2009 at 13:20 IST
India exports 30 tons gold coins, scrap gold to Dubai
Commodity Online
DUBAI: High gold prices, slumping jewellery sales and rising stock market conditions are prompting several Indian bullion dealers to export scrap gold and gold coins to several destinations in the Middle East, especially to Dubai.
In the last few years, India has been the largest importer and consumer of gold. In 2008, India imported around 400 tonnes of gold, which is mainly used for making jewellery items and gold coins. But in the last five months of 2009, India’s gold imports have fallen to negligible levels, compared to previous years, that bullion dealers are now importing scrap gold to Dubai.
India has so far imported only around 47 tons of gold this year.
Bullion dealers point out that there is a new-found love in gold between India, the world’s largest gold consuming country and Dubai, a top global gold trading city. Dubai which generally exports gold to India is these days importing the yellow metal from India.
In the last five months months-January, February, March, April and May-of 2009, India exported nearly 30 tons of gold coins to Dubai, the City of Gold, which has several large India-based gold jewellery show rooms, according to unofficial figures from various jewellery and bullion trade bodies in the country.
Says Mumbai-based bullion trader Ajay Khanna: “We are sending old gold items including jewellery, gold coins and broken items to Dubai for processing. Gold refiners in Dubai and other parts of Middle East are buying such items in large quantity. India has so far exported 30 tons of gold coins and scrap gold Dubai in 2009,” Khanna told Commodity Online.
According to figures from the Bombay Bullion Association, while gold imports by India, one of the top importers of the yellow metals in the world, have fallen this year, gold exports from India have gone up. And, thus, Dubai has emerged as the largest export market for Indian gold coins and jewellery items.
Dubai-based bullion analyst Mark Robinson says rising prices of gold has forced several gold trading companies in India to export scrap gold to Dubai. “Turning old gold into gold coins and then selling to the Dubai market is a big business with several large gold dealers in India,” Robinson told Commodity Online.
Global gold consultancy GFMS said recently that rising gold prices in the last six months has turned India from a large importer of gold to an exporter.
According to Gargi Shah, metals analyst at GFMS, the significance of India’s changed role as a major importer to exporter of gold is very interesting.
Check Shah’s description of gold usage patterns here:
“For instance, my recent trip to Ahmedabad revealed that the buy:sell ratio of jewellery at the retail level has dramatically switched. In 2008, for example, a retailer would typically sell 10 kilogrammes and repurchase around one kilogramme of old jewellery over say a week (i.e. he would need to buy additional metal in the open market).”
”By contrast, in 2009, the same retailer is now purchasing 8 kilogrammes of old gold jewellery per day whilst only selling around 200 grammes of new jewellery. This has led to a significant amount of metal surplus from scrap vis-à-vis the demand in the market. Usually the capacity of the trade to hold the metal (whether a retailer, bullion dealer or any other entity) is at best one week. But the flow of scrap has remained very strong, forcing the market into a substantial discount and making the export of metal profitable.”
”My colleagues who look after the Middle Eastern markets have confirmed the fact that the flow of the metal has changed between the two markets – Dubai and Switzerland, both of which are major exporters of bullion to India, are now receiving considerable quantities of Indian origin scrap.”
Analysts like Robinson and Shah point out that the trade partnership between India and Dubai is increasingly being written in gold.
In fact, India was the top gold trading partner of Dubai for 2008. While gold trade through Dubai rose 53 per cent to $29 billion in 2008 against $19bn in the previous year, the country that carried out the largest gold trade with the Emirates city was India.
Traders say gold trading between India and Dubai has boomed thanks to the fact that there are a large number of jewellery shops owned by Indian businessmen in Dubai, and across other Gulf countries.
MCX SILVERMICRO 30 June 2012
contract was trading at
Rs 55960 , up Rs. 228 . What's your view on it?
After reading this article, people also read:
