There hasn’t been a lot to cheer about in gold markets lately.
But a number of data points coming in of late suggest things may be changing. Albeit quietly.
The latest figures come from critical gold-buying nation India. Where an upswing in purchases appears to be in motion.
Local press reported last week that estimates for March gold purchases in India are running high. With total consumption possibly having run up to 50 tonnes for the month.
That would be a massive increase over previous months. Total gold consumption for the three months from October to December 2013 came in at just 51 tonnes.
The reason for the sudden rise appears to be government regulation. Or lack thereof.
Indian gold consumption has been stymied over the past year by official curbs on buying. Including elevated tariffs on imports. And directives to banks to cut their purchases–in order to prevent depreciation of the rupee.
But speculation is those rules may be moderating. With even the Governor of the Reserve Bank of India being quoted last week as hinting that import curbs will soon be dropped.
If such a relaxation of the rules comes to pass, it could light a fire under gold. Prior to the import tariffs being introduced, Indian buyers purchased a towering 300 tonnes of gold in just two months.
At that time, the gold price was holding firm at $1,600 per ounce. Just before it began a sharp slide to below $1,200.
A return of India to the market could thus be a major trigger for prices headed higher once again. We’ll see if the hints and whispers on import-friendly policies come to pass.