Commodity Online
MUMBAI: India’s gold imports are continuing to get hit by the global economic crisis. For a second month in row, India imported virtually no gold, even though the country is the world’s largest consumer of the yellow metal.

Suresh Hundia, president of the apex bullion trade body Bombay Bullion Association (BBA) said on Tuesday that there have been zero imports of gold in India for the month of March. “Gold demand is sluggish in India thanks to high prices and the economic turmoil,” Hundia said.

He said imports of the yellow metal to India—the largest consumer and importers of gold in the world—are all set plunge to the lowest levels for the decade in 2009.

In 2008, India’s gold imports dipped by 45 per cent to touch 450 tons. Bullion analysts have already predicted earlier this month that if gold imports continue to be sluggish, India’s gold imports will fall 380 tonnes in 2009.

”Gold imports are plunging thanks to the economic conditions that India is finding in these days. We expect overall imports below 380 tonnes for 2009," Vishal Patel, sales trader, India and Middle East, Commerzbank International, had told Commodity Online early this month.

Analysts like Patel and the Bombay Bullion Association (BBA) said that for the first time in this decade, gold imports to India are going to take a big hit.

Gold imports to the country had plunged to zero levels, as no bank and trading houses imported any gold during the month of February. “March has followed February in gold imports. There have been hardly any gold import this month because of the slump in bullion market thanks to high prices of the yellow metal,” Hundia said.

He said gold prices ruling at a high of over Rs 15,000 per 10 gram level is the main deterrent for plunging sales that has resulted in zero gold import to India.

“Gold import during March is going to be almost zero due to absence of any demand because of high prices. If there is reduction in price, we may witness some imports,” Hundia said.

In February, there was no gold import at all, while it stood at 21 tonnes in March 2008 and at 23 tonnes in February last year.

Hundia said, unless gold prices come down to Rs 13,500 per 10 grams level, there will be no demand to support import. Gold prices on Tuesday declined by Rs 50 to Rs 15,200 per 10 gram level in the spot markets from its previous day's close.

Gold is no longer glittering in India, the biggest global market for the consumption and imports of the yellow metal.

Buying of gold jewellery has fallen sharply in January and February leading to a slump in the yellow metal’s imports.

In the last eight years from 2000, gold imports to India every year have been between 400-800 tons. But trade bodies have warned that gold imports this year could collapse to 100 tons, if the current trend continues.

High prices, global economic meltdown and financial crunch among investors and bullion dealers led to low demand for gold in India, where yellow metal is considered the best safe haven investment and people buy gold for weddings and other ceremonies.

They also say that if this lowest level of gold intake continues in India, 2009 will be the worst year in this decade as far as gold imports are concerned.

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