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GRIM REAPER

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BACKWARDATION?? Commercial Banks may be asked to buy gold from citizens

posted on Aug 29, 2013 02:34PM

Now this is what I would call backwardation, India commercial banks begging to buy citizen's gold to protect their currency?? Worth repeating, as I have said before, Silverado Gold Mines production could be around $500/ton which would allow the company to mine at a profit, while the average production cost for the majors $1,100/ton. With world wide high demand for physical gold soaring, Silverado Gold Mines could be among the few with a sign on the front door "Open for Buisness" selling the flavor of the day, high grade "Gold-Antimony" All the company needs to do is find the right financing to put the Nolan Creek project into production, and the world will beat a path to their front door!! GRIM REAPER's "DD" Work

Banks may be asked to buy gold from citizens

Mumbai, Aug 29, 2013, Reuters:

The government is considering a radical plan to direct commercial banks to buy gold from ordinary citizens and divert it to precious metal refiners in an attempt to curb imports and take some heat off the plunging currency.

A pilot project will be launched soon, a source familiar with the Reserve Bank of India (RBI) plans said. India has the world's third-largest current account deficit, which is approaching nearly $90 billion, driven in a large part by appetite for gold imports in the world's biggest consumer of the metal.

With 31,000 tonnes of commercially available gold in the country — worth $1.4 trillion at current prices — diverting even a fraction of that to refiners would sate domestic demand for the metal. India imported 860 tonnes of gold in 2012.

"We will start a pilot project among some banks where we will allow them to buy back gold from individual households," the source, an official familiar with the central bank's gold policymaking, said. "This will start soon, we have discussed (it) with banks."

The RBI will ask the banks to buy back jewellery, bars and coins for rupees. Lenders will have to offer better rates than pawn shops and jewellers to lure sellers.

Any talk of using the country's gold to help meet India's international obligations revives memories of a 1991 balance of payments crisis — when India flew 67 tonnes of gold to Europe as collateral for a loan to avoid a sovereign debt default.