Ron2008

Look Who's Betting on Inflation

Good points, Anthony. India certainly isn't buying gold this year.

"Demand will fall more," Suresh Hundia, president of the Bombay Bullion Association, said. "Only those who are short will buy at these prices."

He estimated gold imports to fall to 350 tonnes in 2009 from 523 tonnes last year.
in.reuters.com/article...

According to Daman Prakash, a director with MNC Bullion, high prices have kept consumers away, with festival sales this year being 60%-65% below last year's sales.

In a glaring example of how high prices have hit demand, Chennai, a major market in southern India, is likely to import only around 1-2 tons of gold in the festival months of August to November compared with 6-7 tons last festival season. Average imports during the festival season has been 10-12 tons in previous years before poor demand hit imports since last year.

In the next three to four months, there are about 30 days Indians consider auspicious buying gold.

During the January-August period, India's gold imports fell to 91.6 metric tons compared with 261 tons in the same period last year, according to preliminary data from the Bombay Bullion Association.
online.wsj.com/article...

On Sep 14 09:17 AM Anthony B wrote:

> So, gold is going to decouple from other commodities? Possible short-term,
> but if gold is to remain that high commodity traders will move down
> to other commodities that are underperforming on their traditional
> price ratio to gold. At that point my previous comment is again
> important: "All this money is being pumped into commodities, but
> without wage inflation who is going to buy them. From Felix Salmon's
> article last week on depressing income stats: US median household
> income $51,295 in 1998, $50,303 in 2008."
>
> And then in response to China and India's growth, which I don't doubt
> can remain in upper single digits, I think Philip Davis has a good
> perspective, "China and India, which account for roughly 40% of the
> world’s population, consumed about $2.5 trillion of goods and services.
> The US, with 4.5% of the world’s population, has $10Tn of consumer
> spending. A 10% drop in US consumption would need to be offset by
> a 40% increase in China and India’s consumption - it’s not going
> to happen, folks! Just this weekend, in Member chat, our main topic
> was dead and dying malls (anecdotes by members) and poor retail sales.
> China can’t keep manufacturing goods if no one is buying them - Economics
> 101."