Last Updated : 15 September 2009 at 15:40 IST

India’s gold imports witness sharp rise in August

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NEW DELHI (Commodity Online): India’s gold imports spurted sharply in August. Imports of the yellow metal went up around three fold to touch 21.8 tonnes when compared to 7.8 tonnes in July this year on the back of festival and marriage seasons’ demand, according to the data compiled by Bombay Bullion Association.

The gold imports were at 98 tonnes last year in the same period just before the recession started and after the recession was officially declared there was a sharp decline in gold imports in the country, said an analyst.

At the Multi Commodity Exchange the October gold was today ruling at Rs 15,766 per 10 grams, while in global markets it was at $988 an ounce (28.34 grams).

Gold imports have been sluggish so far this year and were at 81.2 tonnes during January-August 2009, compared to 261 tonnes in the same period last year, the data said.

In January, only 1.8 tonnes of gold was imported followed by no imports during February and March due to lack of demand on high prices following recessionary pressures.

Earlier, gold imports had touched 20 tonnes in April, on account of 'Akshaya Tritiya' - a festival considered auspicious for buying gold.

Last month, bullion dealers had said that India gold imports may decline 63% this year to 250 tonnes as persisting high prices and a weak rupee affect demand.

Bullion market also reports said imports may fall to 250 tonnes as there has been continuous rise in prices, they are still above $950, and also due to rupee depreciation.

India imported 675 tonnes of gold in 2008. If prices stay where they are, at least 300 tonnes of scrap will come to the domestic market (from the households).

National Spot Exchange has set up a new electronic system to guarantee gold bullion prices and quality.

Reports said that gold demand in rural India may fall by around 20% due to drought situation.

Already, gold imports have been lower by 56% in 2009, and experts say, dip in agriculture production may keep rural buyers away from jewellery shops during the upcoming festival season.