Peruvian gold exports to India are on track to set new records in 2024. This surge is attributed to India’s growing demand for gold, bolstered by recent tax cuts on gold and silver imports. As the world’s second-largest gold consumer, India is increasingly turning to Peru for its gold supply.
Surge in Peruvian Gold Exports to India
Peru’s ambassador to India, Javier Manuel Paulinich Velarde, revealed that gold exports to India could soar by 36% year-on-year, reaching a record $3 billion. Velarde, speaking at the India Gold Conference, highlighted an impressive 81% surge in gold exports during the first half of the year.
India’s Investment in Peruvian Gold Mining
At the conference, Velarde sought to attract Indian investment in Peruvian gold-mining projects. India has emerged as Peru’s second-largest gold customer, trailing only China. In addition to China, other countries like Canada, Mexico, and the U.S. are also heavily invested in Peru’s mining sector.
Currently, Peru has six major gold projects in the investment phase, with a combined investment of $7 billion. This positions Peru as a significant player in global gold production, with India playing a pivotal role in its market.
Impact of India’s Gold Tax Cuts
India’s gold demand has surged in 2024, despite record-high prices. The situation improved further in July when the Indian government slashed taxes on gold and silver imports from 15% to 6%. This tax cut led to a 6% drop in domestic gold prices, even as the global price of gold climbed.
Growth in Gold Jewelry and Investment Demand
The India International Jewellery Show witnessed a substantial increase in orders from retailers. Additionally, the demand for gold coins and bars remained strong throughout the first half of the year. The World Gold Council predicts that the lower import taxes could boost India’s gold demand for jewelry, bars, and coins by over 50 tons in the second half of 2024.
Rising Silver Demand in India
Silver demand in India has also surged alongside gold. As Indian households gain more purchasing power, there has been a significant rise in the demand for appliances like air conditioners and refrigerators, putting pressure on the country’s energy grid. Silver, known for its excellent conductivity, plays a crucial role in these modern amenities.
According to Jon Forrest Little, the increased demand for modern appliances has created an unexpected surge in the need for silver, making it another precious metal in high demand. In fact, India imported more silver in the first four months of 2024 than it did in all of last year.
Conclusion
Peru’s gold exports to India are on the verge of breaking records in 2024, driven by India’s growing demand for gold and strategic tax reductions. As both nations strengthen their economic ties through gold and silver trade, the global impact of this partnership will be significant.
For more detailed updates on gold prices, check out the Daily Gold Signal and explore their Daily Gold Update category for regular insights.
