Mumbai: State-run Union Bank of India hopes to maintain its gold imports at 40 tonnes this fiscal driven by an expanding client base, even as domestic prices hit a record high in late trade on Tuesday, a official said.
“We hope to maintain last year’s level of 40 tonnes,” S. Rajendren, general manager-international banking division, told Reuters in an interview on Wednesday.
“We have done 40% of last year till September and hope to do the remaining in the remainder of the year,” said Rajendren. “We have been expanding our client base including that of exporters.” The bank, one the country’s major importers, expects India’s total gold imports to fall 16% to 600 tonnes in the calendar year, hit by rising prices of the yellow metal and slowdown in the economy.
“Certainly resistance is there because of the economic slowdown,” said Rajendren.
“Next three months will be busy season, it could likely be at 600 tonnes with prices being right,” added Rajendren.
India, the world’s largest consumer of gold, is in the midst of the festival season, with Dhanteras and Diwali, due later this week, when gold buying picks up for auspicious reasons.
India imported around 712.6 tonnes of gold last calendar year, data from World Gold Council showed.
For a graphic on India’s yearly gold imports, click: http://r.reuters.com/cap84d
On the demand scenario for Union Bank, which has 200 branches doing gold coins business, Rajendren said, “sales are happening, but the quantity is not that great. We may have done about an average of 50-60 kgs of coins in the preceeding nine months.”
Indian banks sell around 8 tonnes of gold coins per year.
According to latest data from the World Gold Council, India imported 211 tonnes in 2008 for gold bought as investment, while jewellery was at 501.6 tonnes.
“If prices moderate then there could be more festival sales,” said Rajendren.
Union Bank hopes that a 7 percent drop in prices could revive sagging demand.
“The comfort level now is 1,500 rupees (per gram),” said Rajendren.
The most-traded gold December contract <MAUZ9> on the Multi Commodity Exchange (MCX) was 0.20 percent lower at 16,004 rupees per 10 grams at 12:23 p.m., after hitting a record high of 16,048 rupees on late Tuesday.