Mumbai/London: India has not imported any gold so far in February as high prices dampened demand in the world’s largest market for the metal and the outlook in the coming weeks remains downbeat, the head of a leading trade body said on Friday.
“Zero. There are no reports (of imports) so far,” said Suresh Hundia, president of the Bombay Bullion Association.
India, which buys 500-700 tonnes of gold a year, had imported 23 tonnes last February.
Prices in India have hit records over the past few weeks, partly reflecting a sharp depreciation in the value of the rupee that has made dollar-priced gold costlier.
The rupee hit an all-time low of 51 a dollar on Friday, taking losses this year to 4.5%. The currency had fallen 19.15 in 2008.
Domestic prices of gold climbed to a record of Rs16,040 ($316) per 10g on the Multi Commodity Exchange of India Ltd on 20 February, up 34% from a year ago.
Traders said the high prices encouraged recycling of old jewellery, curtailing imports.
“We sold merely 200kg,” said a dealer in a bank that imports gold for domestic consumption, about one third of what the bank sold the previous year. He said the sales were from its stock.
“Who would like to place orders in such a volatile market where gold and rupee are moving randomly,” he said on condition of anonymity. Hundia said imports would remain down in the coming weeks if prices stayed around the current level.
Imports in January had shrunk to 1.9 tonnes, slumping 89% from the same month last year, data from the trade body showed.
Meanwhile, gold firmed in Europe on Friday as lingering risk aversion amid fresh losses on the equity markets lifted the metal from the two-week lows it hit earlier in the session.
Spot gold edged up to $947.40/949.40 an ounce at 1217 GMT from $944.70 late in New York on Thursday. Earlier it touched a low of $935.70 an ounce.