Mumbai: Gold imports by India, the world’s largest buyer of the metal, fell 47% in 2008 to 402 tonnes as high prices and a slowing economy dented demand, a leading trade body said on Thursday.
The Bombay Bullion Association (BBA) said imports in December slumped 81% to 3 tonnes, from 16 tonnes in the same month a year before, with terrorist attacks in the financial hub of Mumbai also affecting demand.
“Imports were down because prices rose. There were not many marriages or festivals either,” Suresh Hundia, president of the BBA, said.
In 2007, India had imported 759 tonnes of gold.
Gold prices on the Multi Commodity Exchange (MCX) soared to a record Rs14,320 per 10 grams on 10 October, up 35.1% from the close in 2007, before falling to Rs11,290 by 24 October.
Prices again began to rise in November and climbed more than 4% in December to Rs13,690, ending the year up 29.2%, as the dollar weakened against the euro and crude oil rose, enhancing gold’s appeal as a hedge against inflation.
On Thursday, the benchmark February gold on the MCX was up 0.3% at Rs13,676 by 10.48 GMT.
Hundia said an inauspicious period that started on 15 December and runs through mid-January also dented gold sales, while the Mumbai terror attacks in late November kept shoppers away for much ofDecember.
The gunmen had held Mumbai hostage for three days using assault rifles and grenades at two luxury hotels and other landmarks, killing at least183 people.
Gold prices surged Rs225 to Rs13,650 per 10 grams in Delhi on Wednesday, the first trading day of the new year.
Traders said that persistent buying by stockists and jewellers amid restricted arrival mainly led the rise in gold prices.
PTI contributed to this story