Thailand to crack down on Rerouting of Gold to India.

Thailand has agreed to retrospectively reexamine rules of origin certificates issued to Indian gold importers after New Delhi said third gold was routed through Thailand to take advantage of concessional duty available under India-Thailand free trade agreement.

If any certificate is found lacking, importer will have to pay additional duties, spelling more miseries for the sector that has been on the on the policy radar for worsening India's current account deficit.

In the worst case scenario, the imported gold can also confiscated if malafide intent to evade taxes is established.

Don't wait; learn how to claim your's fair share.................

Besides, speaking from experience, this is the first time in almost 10 years that we can remember gold being a hated asset. It was hated in the early part of the decade for all the same reasons: It had no real economic use... it produced no yield, but imposed storage costs... it didn’t do anything other than sit there and look pretty in a cold, dark room.

The people who didn’t understand gold then don’t understand it now. The only difference today is that the horrible price action has brought out the gold bears from the woodwork. They are exacting their verbal revenge. The crowd is bleating for lower prices.

Of course, it could be that we are so embedded in our own position, so wedded to our own beliefs and so complacent after 12 years of rising bullion prices that we’re incapable of considering the evidence in front of us. It is possible we’re refusing to see the gold bear market because we’re emotionally attached to a long-term gold bull market.

Yes, of course, it’s possible. It’s important to know your limitations as a human being and not to mistake good fortune with personal brilliance. But we suspect gold’s days as the premier monetary asset are far from over. In fact, we suspect that gold will be around long after the yen, euro and dollar are being used for toilet paper.

Even artists -- not famous for their interest in financial matters - - seem to know this. One of the exhibits we relished at Hobart’s Museum of Old and New Art took some time to sort out. This is as it should be with a good piece of art, whether it’s a book, a movie or something else. The meaning -- if there is one -- shouldn’t come right out and hit you on the head. If it’s too obvious, it’s either a soup label or a traffic signal.

The exhibit in question looked like a long line of leaf patterns on colored paper, at least from a distance. As you got closer -- and you’d have to lean in really close to examine the paper each leaf was matted on -- you could see that the colored paper was really a collage of old paper currencies. Most of them were from places in South America or Southeast Asia.

This work of art conveys many different emotions and messages, depending greatly upon the individual mind that absorbs it. But for the narrow purposes of today’s essay, the leaves of defunct paper currencies convey a monetary, and perhaps ecological, message. All those forests cut down to make paper currencies that are worthless. Something real turned into something unreal. Something valuable lost; nothing worthwhile gained. That is one meaning you might extract from this canvas.

Paper money possesses value only because everyone tacitly agrees that it does. When that agreement breaks down, the money becomes worthless. That’s why paper money is ephemeral, everywhere and always. It has always come and gone through history, because those who print it cannot resist the temptation to print more. They always do.

But gold is untreelike. It doesn’t grow on trees. And you can’t extract more of it from a printing press. That’s why people have always used it as a store of wealth and a medium of exchange. Its physical properties give it a reliability you can never get from paper money that’s backed by nothing but the “full faith and credit” of a government.

Are we articulating an overly orthodox or unfashionable view of money? It certainly looks like it, based on the last few days of trading in the gold market. Does gold care? Not a jot. Will today’s paper currencies be the museum exhibits of tomorrow? Only if they don’t all get burned to produce something useful first, like heat.

For now, however, all the heat is on gold owners.

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ETF's still score better over buying physical gold....

Exchange traded funds offer all advantages of yellow metal at a lower cost. 1. These are affordable to retail investors since they can buy these in smaller quantities. 2. Purity is guaranteed, usually at 99.5%. In case of physical gold purity is suspected. 3. These are issued in demat form and hence almost no risk to threat. 4. These units can be easily bought and sold on the bourses. 5. The price of unit of gold ETF is available on the bourses on a real time basis. 6. Since held in demat form, cost of holding low compared to physical gold. 7. Long term capital gains of 10% are applicable for gold ETFs for investment held beyond the year, compared to 3 years in physical gold. 8. No wealth tax, VAT, securities transaction tax. inf 9. Gold reduces portfolio risk, acts as a hedge against inflation, turmoil.

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RBI Cautions banks on sale of gold

Curbs on loans against gold coins will moderate India's voracious appetite for the yellow metal and the country's huge import bill. Finding gold coins at your neighborhood bank branch may become tougher. The central bank has suggested that bank should not aggressively sell gold products at their branch. This is the latest attempt by the central bank to stem runaway gold imports, one of the key reasons behind the widening trade and current account deficit. RBI is trying to check the import of gold, which is a major contributor to the country's widening trade and current account deficit. Also an anvil are fresh regulations for incentivizing cross -selling of gold, other financial products to curtail money-laundering. The move indicates that RBI will not give long- standing demand by banks to allow them to buy back gold coins. Bankers believe that the move won't be able to reduce gold sales as customers can always approach jewellers for the same. On the other hand jewellers are happy that they will not have to rush to banks for procuring gold as people will sell gold coins in the open market.

Will RBI action be heplful or harmful?

RBI has cut down the Repo Rate by 25 basis point but, the question remains the same whether the cut will improve the conditions or will not make any difference or make adverse impact. The Macro Report tempers hopes by citing low business & consumer confidence. The Business Expectation Index as under: 1. Consumer confidence declining as policy actions yet to show. 2. Business Optimism continues to be low. 3. Fiscal deficit and current account deficit still a worry. 4. RBI expects inflation to remain above comfort zone. India's strong dependence on external and short-term debts for financing CAD remains a key concern.