Gold and Silver Imports Surge 500% in India
India's gold and silver imports surged 500% from April to May, reaching $8.96 billion according to Mineweb. May's numbers were up 222% compared to 2010.
According to Sudhir Chakraborty, an analyst at Standard Chartered bank, yearly imports of gold and silver in India average around $22 billion. Nearly $9 billion in a single month is unprecedented.
Soaring inflation, which official numbers recently pegged at 8.65%, is pushing demand for precious metals to all-time highs.
Indian consumers have a long tradition of using gold -- in the form of jewelry, coins, and bars -- to preserve family wealth.
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"Rapid inflation is eroding the earnings of the common man. One has to understand how the import of gold has reached $9 billion for a month, while the yearly average is around $22 billion," said Sudhir Chakraborty, bullion analyst at Standard Chartered bank.
Analysts maintained that India's central bank, the Reserve Bank of India's decision to grant licenses to seven more banks to import bullion has helped push up demand.
Karur Vysya Bank, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, Punjab and Sind Bank, South Indian Bank, State Bank of Mysore and State Bank of Travancore were added to the list. As of the start of 2011, some 30 banks in India have been granted permission to import gold and silver. Jewellers are getting easy supplies which is also helping push up demand.+48
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