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Last Updated : Oct 10, 2018 08:48 PM IST | Source: Reuters

India's September gold imports drop 14 percent on weak rupee: GFMS

The drop in demand from Indian importers could weigh on global prices, which have dropped 8.8 percent so far this year.

Rs 12,000 crore | 2018 | Kolkata–based gold trader Nilesh Parekh was arrested by Directorate of Revenue Intelligence sleuths for allegedly siphoning off 1,700 kg of imported duty-free gold and defrauding 25 banks. He was earlier arrested by CBI for allegedly of siphoning off bank loans worth Rs 2,672 crore through hawala channels to dummy companies in Singapore, Dubai and Hong Kong.
Rs 12,000 crore | 2018 | Kolkata–based gold trader Nilesh Parekh was arrested by Directorate of Revenue Intelligence sleuths for allegedly siphoning off 1,700 kg of imported duty-free gold and defrauding 25 banks. He was earlier arrested by CBI for allegedly of siphoning off bank loans worth Rs 2,672 crore through hawala channels to dummy companies in Singapore, Dubai and Hong Kong.

India's gold imports in September dropped more than 14 percent from a year ago as a rally in local prices due to a depreciating rupee reduced demand in the world's second-biggest consumer of bullion, provisional data from precious metals consultancy GFMS.

The drop in demand from Indian importers could weigh on global prices, which have dropped 8.8 percent so far this year.

But lower imports could help the country reduce its trade deficit and support the rupee, which hit a record low this week.

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"In August demand was good but it fell in September due to higher prices," said Asher O, managing director of the India operations at Malabar Gold and Diamonds.

The Indian rupee has fallen almost 14 percent in 2018, lifting local gold prices to Rs 31,531 per 10 grams earlier this week, the highest level in nearly five months.

India's gold imports in August nearly doubled from a year ago to 85.7 tonnes to hit their highest level in 15 months as lower prices prompted manufacturers to stock up for a jewellery exhibition.

But jewellers were carrying ample inventory from August and retail demand was also weak due to Shradh period - a fortnight for paying homage to ancestors - in September, said a Mumbai-based dealer with a private bullion importing bank.

Shradh ended on October 8, giving way to a string of festivals.

"In October, again imports will rise due to festivals," said Bachhraj Bamalwa, a bullion dealer based in Kolkata, formerly the Chairman of the All India Gems and Jewellery Trade Federation.

Demand for gold usually strengthens at the end of the year on purchases for the traditional wedding season and major festivals including Diwali and Dussehra, when bullion buying is considered auspicious.

Investment demand has also started to improve due to a falling stock market and the depreciating rupee, said a bullion dealer based in Chennai.

"Investors are not sure how much the rupee can fall. That's why they are hedging risk by investing in gold," the dealer said.

For the first nine months of 2018, Indian gold imports fell 15 percent from a year earlier to 552.8 tonnes, data compiled by GFMS showed.

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First Published on Oct 10, 2018 06:45 pm
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