Quarterly Record for Indian Gold Demand

World Gold Council reports world’s largest gold buyer headed for record

With gold prices coming off a two-year low, Indian imports of the yellow metal ballooned between 300 and 400 tons in the second quarter of 2013, according to the World Gold Council.

India’s demand for gold was nearly equal to half of all shipments in 2012.

“This report leads us to conclude that Asian markets will see record quarterly totals of gold demand in the second quarter,” managing director of research at the World Gold Council Marcus Grubb said.

“…It is quite likely that the gold previously held in ETFs will find a ready market among Indian, Chinese and Middle Eastern consumers who are taking a long-term view on the prospects for gold,” Grubb added.

Lower prices and offloading of exchange-traded products are cited as main reasons for the boom in demand, which has been ravenous enough to cause shortages for almost any institution dealing in gold coins — even the U.S. Mint.

What this means for you: Strong Asian demand supports the physical market in a time when ETFs are experiencing a mass exodus. With exchange-traded funds only partially backed by physical gold and actual physical gold being snatched up, doesn’t something have to give?