India’s gold imports plunged for fifth consecutive month in May 2018 to 48 tonnes, as a rally in local prices curtailed retail purchases.
Price of gold was close to its highest level in 21 months, provisional data from precious metals consultancy GFMS and bank dealers showed.
Compared to a year ago, retail purchase in the month of May this year has dropped by 60 per cent. Gold prices have been going north since December last year. However, lower gold imports could help India reduce its trade deficit.
The price of gold in retail markets in India have jumped due to the depreciating rupee and dampened retail purchases. Local gold prices have risen more than 5 per cent so far in 2018.
India had imported 119.3 tonnes of gold in May 2017 as jewellers increased purchases to replenish inventory and stocked up ahead of the implementation of a new national sales tax from July 1, 2017.
The country’s gold imports in the first five months of 2018 fell 39.4 percent from a year ago to 274.2 tonnes, data compiled by GFMS showed.
To add to its woes, May 2018 also saw the advent of Adhik Maas, an extra month in the Hindu calendar that started on May 16. It is considered inauspicious and people avoid weddings, buying gold or property during the period.
Traders expect India’s gold imports in June to also remain below 50 tonnes due to higher prices. Gold has been trading in discount in local market. Jewellers are not interested in building stocks at the current price.