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Informist, Tuesday, Jul 16, 2024

 

By Sandeep Sinha

 

MUMBAI – Gold imports into India more than halved to 38-43 tn in June from 89.41 tn a year ago, according to trade and industry sources. The imports fell because of fewer auspicious days for weddings during the month and as buyers deferred their purchases in view of higher prices. In May, gold imports into the country were at 46.25 tn, according to commerce ministry data.

 

"Gold imports fell by more than 50% in June as Indian gold demand remained muted due to high prices, with consumers deferring purchases in anticipation of a possible import tariff drop in the upcoming Budget," said Prithviraj Kothari, managing director of RiddiSiddhi Bullions. "Gold prices traded 71,000 to 73,000 rupees range in June after the sharp rally and record high prices in April and May. Higher gold prices have started to pinch buyers in April to June as consumer sentiment has slowed waiting for a correction in prices," Kothari said.

 

Trade data released by the commerce ministry on Monday showed the value of gold imports fell 38.7% on year to $3.06 bln in June, from $5 bln a year ago. The monthly provisional data released by the ministry gives the import data only in value terms.

 

The country's gold imports in Jan-Jun rose 4% on year to around 302.5 tn against 291 tn in the same period a year ago. In the Jan-May period, the imports were 30% higher on year at 261.7 tn.

 

"The reasons for the sharp fall in imports were gold prices hovering near record-high, no demand in market, and expectation of the customs duty cut in the upcoming Budget," Surendra Mehta, national secretary at India Bullion and Jewellers Association, said.

 

If the government announces a cut in customs duty in the upcoming Budget, then gold prices may correct by 2,000-3,000 rupees per 10 gm, traders said.

 

In the first five months of 2024, Switzerland was the largest bullion exporter to India, followed by the United Arab Emirates, South Africa, Peru and the Dominican Republic. In Jan-May, the country imported 100.46 tn of gold from Switzerland, 38.7 tn from the UAE, 28.55 tn from South Africa, 22.95 tn from Peru, and 15.06 tn from the Dominican Republic, the commerce ministry data showed.

 

The price of the yellow metal is currently less than 1% from the record high of 74,442 rupees per 10 gm touched on May 20. On the Multi Commodity Exchange and COMEX, gold prices fell 0.4% and 0.3% on month respectively in June.

 

"If prices remain elevated, we might see a subdued gold demand in July too, as the Budget will be announced next week. The monsoon season has now begun, and farmers in rural regions are busy sowing summer crops, resulting in decreased footfalls at jewellery stores. Monsoon season is generally considered as lull season for gold demand, and demand is expected to pick up when the festive season starts in August," Kothari said.

 

India, the second-largest importer of gold after China, imported 734.3 tn of gold in 2023, up 3% from 2022. In an interaction with Informist, Sachin Jain, India region chief executive officer of the World Gold Council, said he expected the country's bullion imports to remain at 700-800 tn gold in 2024.  End

 

US$1 = 83.58 rupees

 

Edited by Ashish Shirke

 

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