Indian central bank's candid objective: to 'dematerialize' gold, making it only imaginary

Section:

If only India would try "dematerializing" its central bank instead.

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Reserve Bank Official Supports 'Dematerialisation' to Arrest Rising Gold Demand

From The Economic Times
(The Times of India, Mumbai)
Sunday, November 25, 2012

http://economictimes.indiatimes.com/news/economy/foreign-trade/subir-gok...

PUNE, India -- Reserve Bank Deputy Governor Subir Gokarn today said there is a need to "dematerialise" gold like any other financial product to reduce its physical imports, the rise of which has been blamed for the high current account deficit that is feared to touch new record high this year.

High gold imports are "creating some macroeconomic stresses and so the challenge is to find ways to replicate the financial characteristics of gold without necessarily causing physical importing," Gokarn told the last day of the two-day annual Bancon conference here.

The current account deficit has been rising on the back of record trade deficits, which in October jumped to a 12-year high of $21 billion on the back of rising oil and gold imports.

... Dispatch continues below ...



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Reeling out the high gold import data, Gokarn said a working group headed by KUB Rao of RBI will shortly be coming out with its report on the ways to deal with the problem arising from high gold imports on the macroeconomic front in the form of balance of payments.

He said while global gold output has stayed stable at around 4,000 tonne per year, the domestic [Indian] consumption of the yellow metal has doubled to 1,000 tonnes annually since 1999, despite a massive rally in the gold price.

"More expensive gold is being imported in larger quantities, which is compounding the trouble," he said.

As gold imports touched a record high last year, pushing up the current account deficit to a historic high of 4.2 per cent in the year, the Reserve Bank has unveiled a slew of curbs on gold purchases and financing.

Last fiscal year there was a 39 per cent rise in gold imports and in gross terms it constituted 80 per cent of the current account deficit, which reached an all-time high of 4.2 per cent, Gokarn said, adding that the net gold imports constitute for 1.8 to 2.4 per cent of GDP.

This spike in gold demand was in spite of the record price rally that the metal witnessed last fiscal year.

In April the RBI brought down the loan to value that gold loan companies like Muthoot Finance or Manappuram Finance could offer to just 60 per cent of the market value, from a high of 85-90 per cent.

In the October 30 credit policy, the RBI also banned banks from funding gold buying by gold loan companies and non-banking financial companies.

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Prophecy Platinum Intercepts Best Pt+Pd+Au Grades Yet
at Wellgreen Project in Yukon Territory: 5.36 g/t

Company Press Release
Tuesday, September 11, 2012

VANCOUVER, British Columbia -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) announces more results of its 2012 drill program on the company's fully-owned Wellgreen platinum group metals, nickel, and copper project in southwestern Yukon Territory, Canada. Four surface holes and four underground holes all intercepted significant mineralized widths, ranging from 28.5 meters (WS12-201) and up to 459.5 metres (WS12-193). Highlights include WU12-540, which returned 8.9 metres of 5.36 grams per tonne platinum, palladium, and gold; 1.73 percent copper; and 1.01 percent nickel within 304.5 meters of 0.66 g/t platinum-palladium-gold, 0.20 percent copper, and 0.27 percent nickel.

The surface drill program started in June and has completed 16 holes (assays pending for 12 holes) with two rigs now on site. The surface program continues to progress at a steady pace.

Prophecy Chairman John Lee commented: “Wellgreen is a very large nickel, copper, and platinum group metals project with near-surface high-grade zones. High-grade intercepts will be incorporated into resource modeling and mine planning in the pre-feasibility study. We expect further positive drill results from Wellgreen shortly.”

Wellgreen features a low 2.59-to-1 strip ratio, is situated at an altitude of 1,300 meters, and is only 15 kilometers from the two-lane paved Alaska Highway. Those factors significantly minimize the project's indirect costs.

For the complete company statement with full tabulation of the drilling results, please visit:

http://prophecyplat.com/news_2012_sep11_prophecy_platinum_drill_results....