India’s 2012 gold imports seen falling 25%

High prices, poor liquidity, inflation and a hike in customs duty to dampen buying sentiment
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First Published: Mon, Oct 15 2012. 03 53 PM IST
Gold imports can be expected to range between 650 to 700 tonne. Photo:  Priyanka Parashar/Mint.
Gold imports can be expected to range between 650 to 700 tonne. Photo: Priyanka Parashar/Mint.
Updated: Mon, Oct 15 2012. 09 40 PM IST
New Delhi: India’s gold imports in 2012 is estimated to drop by around 25% from last year as high prices, poor liquidity, high inflation and a hike in customs duty has dampened buying sentiment, a member of a trade body said on Monday.
“Gold has been hit in every way. There is a liquidity crisis because of high interest rates and the monsoon was not very good in some states (so purchasing power will be low),” said Prithviraj Kothari, a member of Bombay Bullion Association, a body representing bullion traders, manufacturers and retailers. “The whole cycle of investment has slackened. The equity market and real estate are both slow so it is affecting gold.”
Kothari said in the full year, gold imports can be expected to range between 650 to 700 tonnes. In 2011, India imported 933.4 tonnes of gold, down 7% from an all-time high of 1,006.3 tonnes in 2010, according to World Gold Council.
Some buying is expected to pick up later this week when an inauspicious period ends on Wednesday and purchasing for the oncoming festival and marriage seasons begin, Kothari said.
India’s inflation in September was at 7.81%, on the back of high food and fuel prices that lowered the chances of the Reserve Bank of India cutting interest rates to shore up the sluggish economy.
In the budget for this fiscal year, the government raised the import duty on non-standard gold to 10% from 5% earlier in a bid to slowdown the rising imports that were hurting the current account deficit. On gold coins and platinum, duty was raised to 4% from 2% earlier.
On Monday, spot gold traded at Rs 30,961 per 10 grams, down from Rs31,080 on Saturday, data on the Multi Commodity Exchange of India showed.
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First Published: Mon, Oct 15 2012. 03 53 PM IST
More Topics: Gold | Bullion | Metal | MCX | Commodity |
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