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Signs of a turnaround as No. 3 India gold fund reopens

by Frik Els | October 23, 2013 | Reprinted by permission of

Signs of a turnaround as No. 3 India gold fund reopens

Confidence is creeping back into the battered Indian gold investment market.
(Photo of the Golden Temple in Amritsar: Dainis Matisons)

Over the past year and a half P. Chidambaram, India’s finance minister, has been fighting his country’s insatiable appetite for gold.

Gold import duties have risen tenfold—from 1% at the start of 2012 to 10% today.

Excise duties now stand at 9% while new rules such as strictly cash only for imports and transaction taxes, among other punitive measures, have stymied India’s gold industry.

Some of the anti-bullion measures are now being lifted.

The $300-million Reliance Gold Savings Fund, India’s third-largest gold-backed investment fund, will now accept fresh investments again after a 12-week hiatus.

The fund suspended sales in support of the Indian finance ministry’s efforts at the beginning of August.

Part of billionaire Anil Ambani’s Reliance Capital empire, the fund cited a stronger rupee and a better economic picture as reasons behind the reopening.

India’s gold-backed ETF industry is tiny compared to the U.S. and Europe, with the 14 funds’ assets under management totalling only around $1.7 billion.

Within the larger context of the Indian gold trade, Reliance’s move may not be such a big deal, but the reopening of the fund does show some confidence is creeping back into the Indian gold investment market.

Reprinted by permission of

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