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Informist, Friday, Nov. 22, 2024

 

By Sandeep Sinha

 

MUMBAI – Gold imports into India fell over 30% on year to 82-87 tonnes in October from 121.93 tonnes a year ago, according to trade and industry sources. The decline was primarily due to a higher base from last year and as domestic gold prices hit a lifetime high last month, aided by safe-haven demand due to uncertainty related to the US presidential election.

 

However, on a month-on-month basis, the yellow metal's import is likely to be up nearly 40% due to festive and wedding season demand. In September, the country imported approximately 59 tonnes of gold, according to data by the commerce ministry. "Elevated global and domestic gold prices dampened consumer buying, especially for larger volumes. A weaker rupee made gold imports more expensive, affecting demand. Imports rose from September's 59 tonnes as the festival season began, with Dhanteras and Diwali at October-end," Prithviraj Kothari, managing director of RiddiSiddhi Bullions, said.

 

On Oct. 30, gold prices hit all-time highs of INR 79,775 per 10 gm on the Multi Commodity Exchange of India and $2,801.80 an ounce on COMEX. "There are 3.7 million weddings across India till mid-December, which is supporting jewellery demand. There is a fear among consumers that gold prices will go much higher from the current level, so they are buying at the current level," Kumar Jain, national spokesperson for the India Bullion and Jewellers Association, told Informist.

 

Trade data released by the commerce ministry on Nov. 14 showed that the value of gold imports fell 1.4% on year to $7.13 billion in October. Monthly provisional data released by the ministry provides the import data in value terms alone.

 

India imported gold bars worth $353.08 million in October, up 35.1% from a year ago, according to the latest data from the Gem and Jewellery Export Promotion Council. The country imported $56.79 million of gold jewellery in October, up from $53.17 million a year ago, the data showed. 

 

In value terms, bullion was the third-largest imported commodity, accounting for 10.7% of total foreign exchange outflows, after petroleum and electronic goods. In September, the share of gold in total imports was 7.9% at $4.39 billion. For Jan-Oct, the country's gold imports were down 1.1% on year at 626 tonnes, according to trade sources.

 

Kothari said that demand for gold in India will remain stable in November, supported by the wedding season despite elevated prices. Buyers are cautious due to high domestic rates, influenced by the global market and a weak rupee. However, festive and wedding-related purchases are sustaining moderate demand. Retailers are offering discounts, and lightweight jewellery is popular as consumers adapt to higher costs. "The overall sentiment suggests demand recovery compared to previous months, although not at peak levels due to financial constraints and market volatility," he said.

 

During Jan-Sept, for which official data is available, Switzerland was the largest bullion exporter to India, followed by the United Arab Emirates, South Africa, Peru, and the Dominican Republic. During this period, India imported 168.31 tonnes of gold from Switzerland, 140.37 tonnes from the UAE, 47.65 tonnes from Peru, 46.51 tonnes from South Africa, and 25.33 tonnes from the Dominican Republic, according to commerce ministry data.

 

India, the second-largest consumer and importer of gold after China, imported 734.3 tonnes, 713.31 tonnes, and 1,067.7 tonnes of gold in 2023, 2022, and 2021, respectively. End

 

US$1 = INR 84.49

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Namrata Rao

 

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