“Three years ago; India’s previous government began radically curbing gold imports, culminating in a near-total ban in gold imports to the world’s greatest gold-lovers, and second-largest population. As was explained at the time , the ban on gold was for no reason in terms of economic fundamentals,” according to ETF Daily News.
Related: Bullish Forecast for Gold ETFs
Gold trading volumes have already surged in Asia. For instance, in China, SGE volumes jumped to 330 metric tons, or 102% higher than the level seen around the Brexit vote, according to the World Gold Council. Moreover, anecdotal evidence suggests that institutional investors and hedge funds have yet to jump in, which indicates that gold demand has more room to run.
“While this current push in India will have no long-term effect on the gold market, the potential for a short-term disruption of imports into that nation is acknowledged. In this respect the timing of the latest announcement from the One Bank’s puppets in India is interesting,” according to ETF Daily News.
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Tom Lydon’s clients own shares of GLD.