India Gold Imports Plunged to Five-Month Low

SEATTLE (Scrap Monster): The gold bar imports by India plunged to a five-month low in the month of January this year. The monthly imports totaled 0.92 metric tonnes (MT) during the month, registering notable decline by 64% over the prior month. The country’s gold imports had totaled 2.56 MT in December 2019.

According to Haresh Acharya, Director, India Bullion and Jewellers’ Association (IBJA), the gold purchases remained muted, especially on account of Kamurta period that extended till mid-January. Consequently, wedding purchases too lost their sheen. The gold prices at record levels, due to several geopolitical factors, acted as deterrent for gold purchases, he said. Moreover, purchases were postponed on hopes of a possible import duty cut in gold during the Union Budget.

The historic high prices of gold led to boosted supply of recycled gold. Consequently, overall volume of gold traded saw huge decline. In addition, the unseasonal rainfall impacted rural incomes, which also led to reduced gold purchases. Incidentally, rural customers account for nearly 60% of the total gold demand in the country.

The gold imports by the country recorded 45% year-on-year dip between July-December in 2019, after the government decided to hike customs duty on gold imports to 12.5% in Budget 2019.