Indian gold imports often account for 20-25% of total global demand. The first half of 2019 was shaping up as the potentially the biggest year on record for Indian silver imports.
In July of 2019, Indian silver imports topped 1041 tons the highest monthly total since December 2015, a year in which Indian silver imports set a record. Silver imports in 2019 appeared to be headed to another record. Since July, Indian silver imports fell nearly 90% in October and November to just 168 and 164 tons, respectively.
The year ended, however, with Indian silver imports up substantially higher than most recent years, but short of a record.
A second half of the year surge in silver prices most likely attributed to the decline in Indian silver imports. The last time Indian silver imports fell in a similar fashion was in 2016 when the Brexit vote sent the price of silver over $20 an ounce.
India imported 1041 tons of silver in July, the most silver India imported since December 2015 when it imported 1045 tons.
India’s love affair with gold is legendary. India imports hundreds of tons of gold a year and it is estimated that Indian households and temples have over 22,000 tons of gold! India, however, is making its mark on another precious metal – silver. Over the last ten years Indian silver imports have climbed steadily. Since 2013, Indian silver imports have averaged over 6,100 tons annually, an increase of 118% over the period of 1999-2012 when Indian annual silver imports averaged about 2800 tons. In 2015, Indian silver imports accounted for about 1/3 of annual silver mining production!
India has virtually no domestic gold mining production and little silver production. As a result, India relies extensively on imports and secondary supply to meet its precious metals demand.
While Indians appear to import silver opportunistically, curbing imports during price spikes and loading up when the price dips, they don’t stay away from the silver market for long.
With silver prices leveling off the past two weeks, its possible Indian silver imports will regain their first half of 2019 pace.
This article by BGASC is not, and should not be regarded as, investment advice or as a recommendation regarding any particular course of action.