India’s gold imports in September 2021 shoot up on price correction ahead of the festive season

India’s gold imports in September soared 658 per cent from last year’s lower base as a correction in local prices to the lowest level in nearly six months prompted jewellers to step up purchases for the upcoming festive season, Reuters reports. Retail demand has been improving and jewellery stores are registering good footfall.

Higher imports by the world’s second-biggest bullion consumer could support benchmark gold prices, which have fallen nearly 15 per cent from an all-time high of $2,072 in August 2020. The surge in imports could increase India’s trade deficit and pressure the rupee.

India imported 91 tonnes of gold in September, compared to 12 tonnes a year earlier. In value terms, September imports surged to $ 5.1 billion from $601 million a year ago. India’s gold imports in the September quarter surged 170 per cent from a year ago to 288 tonnes, a government official told Reuters.

Last month global prices were correcting, and rupee was appreciating. The combination brought down local prices significantly and allowed jewellers to stock up.

Local gold futures fell to 45,479 rupees ($611.93) per 10 grams last week, the lowest in nearly six months.

The country’s gold imports in October could rise above 100 tonnes from 45 tonnes a year earlier if prices remain stable around the current level of 46,300 rupees.  Retail consumers are now stepping out for shopping. The fear of coronavirus has been going down with a drop coronavirus cases. Indian authorities had imposed localised lockdowns in the June quarter as COVID-19 infections surged to a record high, but allowed businesses to reopen in a phased manner as cases fell.

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