Gold supplies restricted to India - Action replay?

Foreign banks cut down gold supply to India- Bullion-Markets-The Economic Times

With the credit crisis having a direct impact on funding costs and drying up of interbank credit lines, a few foreign banks have altogether stopped supplies of gold to Indian banks in a bid to reduce their exposure to Asian markets.

This comes at a time when global liquidity pressures have eased considerably and local demand for the yellow metal has picked up as prices have come off the highs witnessed in the early part of October. Dealers from many banks told ET that supplies have been squeezed with banks, such as Standard Bank of South Africa, one of the main suppliers, Commerzbank and UBS, stopping supplies altogether or reducing them on a consignment basis.

“Both Commerzbank and Standard Bank have stopped supplies on a consignment basis to Indian banks since October, while UBS has reduced its exposure,” said a bullion dealer from a public sector bank.

When the world's largest buyer reduces buying ...

You get lower goldprices. And that is what has been happening in the last 1 mon

India has been denied gold supplies as per Indian market requirement for 100 out of the last 110 years. Bretton Woods could drag on for 30 years due to restrictions on gold purchase by Indians. Is this another attempt to restrict gold purchases by Indians?

The world must privatize gold reserves completely. That is one sure way to ensure that Governments do not have inordinate influence on the lives of citizens.

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