In this interview with Sunny Pannu of Minaurum Silver, I discuss the Asian gold market, with a focus on India and China.

I explain why India’s gold demand cannot be understood through official statistics alone, why import restrictions create smuggling and corruption, and why Indians continue to hold gold as protection against inflation, currency depreciation, and a corrupt state. We also discuss China’s growing gold demand, the strength of the renminbi, and Chinese interest in overseas mining projects.

Watch the full discussion below:

Key Takeaways

• India is difficult to define as a unified country because of its diversity of languages, cultures, and social divisions.
• Indians buy gold because they distrust the state, the currency, and the domestic investment environment.
• Official Indian gold-import figures are unreliable because much of the trade moves through cash transactions and smuggling.
• Gold-import restrictions do not eliminate demand; they mainly redirect gold into unofficial channels and strengthen corruption.
• India’s chronic current-account problems reflect deeper failures in productive industry and exports.
• I remain pessimistic about India because of stagnation, falling savings, corruption, and weak wealth-creating capacity.
• China has likely absorbed much of the gold demand slack created by India’s weakness.
• Chinese buyers continue to accumulate gold, partly as protection against political risk and confiscation.
• Chinese mining companies remain interested in overseas resource assets, but they have become more careful after overpaying for bad projects.