India’s gold imports in January plunged 48% from a year earlier to their lowest level in 4 months as a rally in local prices near record highs prompted buyers to curtail purchases, Reuters reported ascribing the news to a government source.
India, the world’s second-biggest buyer of gold imported 36.26 tonnes in January, compared with 69.51 tonnes a year earlier. In value terms, January imports totalled $1.58 billion, down from last year’s $2.31 billion, he said.
Gold demand in India in the December quarter dropped 18 per cent over the same period in the previous year to an eight-year low of 194.3 tonnes, according to the World Gold Council (WGC). The third quarter was crucial because of a fall in demand in the Diwali days in the year-ago equivalent period. However, that failed to boost numbers because of high prices, weak consumer sentiment, and rural distress.
India’s demand in 2019 was down 9 per cent at 690.4 tonnes.
India’s net import of gold in 2019 was down 14 per cent to 646.8 tonnes, but in the December quarter it was lower by 18 per cent at 138.5 tonnes. The council is hopeful of revival in India’s demand in 2020.
Consumption in India is forecast to drop to the lower end of a 700 to 750 ton range this year, the lowest since 2016, as a surge in prices coupled with a weak economy keeps buyers away, according to the World Gold Council. Benchmark gold futures in Mumbai have jumped more than 20 per cent this year and touched a record of Rs. 39,885 ($562) per 10 grams in early September.
The final quarter is typically the strongest for gold demand in India when a raft of festivals coincides with the peak wedding season to push up sales. This year sales on Dhanteras, the most auspicious day in the country to buy the metal, slumped even as jewelers lined up offers to draw in buyers.