Mumbai: India’s demand for gold has revived, with the country importing small amounts for the first time in two months, and is seen strengthening with a festival falling at the end of April, dealers and traders said on Monday.
India’s demand for gold revived when gold broke below the psychological level of $900 an ounce on Thursday and some dealers said they had placed orders overseas to replenish stocks.
“We have placed a lot of orders from Thursday onwards,” said a dealer in a private bank. “If gold remains below Rs14,500 per 10g, demand will continue to be there.”
A gold supplier to India said demand was low, but may get stronger ahead. “There is some demand around, but still nothing to write home about,” said Afshin Nabavi, head of trading at MKS Finance SA, a Geneva-based gold supplier.
“I think with the festivities approaching and the gold price coming off, there may be some demand (in the near future).”
Gold prices fell more than 2% on Monday in Asia, sliding towards a two-month low near $870 (Rs43,500) an ounce. Gold has now fallen about 13% since touching an 11-month high above $1,000 in February.
Last month, the head of an Indian trade body said the country had imported no gold for the second month in a row in March. “Our records are showing zero so far,” Suresh Hundia, president of the Bombay Bullion Association (BBA) had said.
Imports in February and March last year were 23 tonnes and 21 tonnes, respectively.
India has been the world’s biggest buyer of gold for years, but imports slumped 48% in 2008 to 396 tonnes. The falling trend has continued this year with imports in January plunging 89% from the same month last year to 1.9 tonnes. But the demand picture could brighten soon.
Akshaya Tritiya, one of India’s two biggest gold-buying festivals along with Dhanteras, falls on 27 April when citizens, specially in the south, are expected to buy gold regardless of price, as they believe it will ensure lasting prosperity.
Gold prices in India hit an all-time high on 20 February at Rs16,040 per 10g, up 34% on the year. On Monday, gold was quoted at Rs14,174, down from the previous session, tracking foreign markets and a stronger rupee against the dollar.