Now, we’ve been getting a lot of two-way information regarding India. ... The World Gold Council estimates gold smuggling to be 20 to 30 tons per month, but my wholesaler says this is a ‘gross underestimation,’ and could be as high as ’50 tons per month.’
Although this large scale smuggling has partially offset an enormous pent-up demand, once restrictions are eased, gold demand will explode (in India). As most Indian gold is sourced in London, this catch-up physical demand will have an immediate impact on price. Indians are used to a $1,450+ gold price already. So there is going to be little in the way of sticker-shock for them.
As far as silver is concerned, the most recent import data recorded Indian silver demanded from April 2013 to January 2014, was 1,497 tons. That is a record for this period during the last 5 years. This data is significant as it matches the strong April 2008 to January 2009 period, when silver reached a bargain price of $8.40 an ounce -- Indians know how to recognize a bargain.
This 100% confirms our reports of a ramp-up in wholesale silver bullion bars being airfreighted to India. Silver fundamentals are extremely bullish as is the current paper market structure. ... At the margin it is wholesale silver that is in short supply, not retail bars. And JP Morgan is leading the way now in stockpiling 1,000 ounce silver bars. It’s not rocket science to realize why they are doing this.”