Bank deposits score over gold; imports may dip 55% in Feb

Bank deposits score over gold; imports may dip 55% in Feb

Mumbai: Higher returns from bank deposits seem to have robbed the sheen of the yellow metal with a massive decline of above 55% expected in gold imports in February.

India’s gold import is likely to dip by 55% to 20-25 tonne in February as compared to 45 tonne in the same month in 2010 following increase in bank deposit rates to nearly 10%, Bombay Bullion Association president Prithivraj Khotari told the news agency here.

“Higher food inflation and liquidity problem in the market have further affected the demand," he said.

Khotari said record gold prices during February, which almost touched Rs21,000 per 10 grams, is also likely to have negative impact on imports. India is the world’s largest consumer of gold.

Gold price on Multi-Commodity Exchange on Saturday ruled at Rs20,961 per 10 grams, while the international price was at $1,410.20 an ounce (28.34 grams).

However, the World Gold Council had recently given a positive outlook for the precious metal in 2011 despite the ruling high price.

“Last year was great year for gold globally, specially, for India and China. India emerged as the strongest market with total demand rising by 66% at 963 tonne amid strong economic growth. The outlook for this year is also robust," WGC managing director (Middle-East and India) Ajay Mitra had recently said.