Massive Gold & Silver Demand Out of India

With gold trading near $1,500 and silver up over $1, today King World News interviewed Rick Rule Founder of Global Resource Investor, now part of the $9 billion strong Sprott Asset Management.  


When asked about the physical gold and silver markets Rule stated, “Some forecasts by the World Gold Council have to do with increasing prosperity in India, particularly in rural India and the potential impact that would have on gold and silver consumption.  For people who own gold and silver and would like to see higher prices, that will certainly make them feel good.”
“They (WGC) point out that many parts of the Indian citizenry don’t have very much trust in their own government or in their own currency.  Indian savings rates, because there is no social safety net that’s government provided, Indian savings rates are between 30% and 40% of income, and the traditional savings vehicles in India have been gold and silver bullion.

As a consequence of higher incomes...the savings rates are staying constant as a percentage of income, but the income rates are rising.  Because so much of the saving takes place in precious metals, Indian precious metals demand is increasing.

The traditional wedding present in India is gold.  Gold bullion becomes a financial asset that the bride has that’s the only financial asset that she controls.  The dowry payment that she gets is in precious metals and it becomes her sole and separate property.  Given the fact that India experiences in excess of 15 million marriages per year, that in and of itself is a substantial demand driver for gold, and this is gold that doesn’t get spent except in the most dire of all emergencies.”   

When asked if summer may not be as rough for gold and silver as we traditionally see because of the Chinese and Indian ‘puts’ under these markets Rule remarked, “I think that’s right and I also think by the way that the demand for silver in India has always been there, it’s been very difficult to quantify so Americans haven’t paid much attention to it.  If I might be cynical, which you’ve allowed me to do in the past, it’s generally difficult for Americans to comprehend.  It doesn’t sell newsletters, so American speculators haven’t been inundated with information about it, but the Indians have traditionally been the most important swing player in the physical silver market forever.”

The KWN audio interview with Rick Rule will be released shortly and you can listen by CLICKING HERE.   

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