India is known as the biggest consumer of gold in the world, much of it sold in the form of investment-grade jewelry (with high caratage and low design premiums). Privately possessed gold in Indian is estimated at 15,000,000 kilograms. But with gold prices high many Indians are rushing to sell their gold, seeing this as an opportunity to profit.

India normally imports 90% of the gold supply needed to meet demand. But now as Indians become net-sellers of gold, imports have fallen off.

The beginning of the year is wedding season in India, a time of giving gifts of gold. People are still buying, but are not increasing their budgets. They are simply settling for less gold within their budget. And with all the selling going on, local supply can meet all of the demand for wedding gold without any imports.

But even then Indians have become net-sellers, the rest of the world are now becoming buyers of gold, a trend which will probably continue for quite a long time throughout this current financial storm.

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