India 2019 Gold Imports Hits Three-Year Low

A salesman arranges gold bangles inside a jewellery showroom on the occasion of Akshaya Tritiya, a major gold buying festival, in Mumbai, India, May 7, 2019. REUTERS/Francis Mascarenhas

MUMBAI – India’s gold imports in 2019 fell 12% from a year ago to the lowest level in three years as retail buying faltered in the second half after local prices rallied to a record high, a government source said on Friday.

Lower buying by the world’s second biggest consumer of the precious metal could weigh on global prices that jumped 18% in 2019, but help the government bring down the trade deficit and support the rupee.

India meets nearly all its gold demand through imports, which amounted to 831 tonnes imported in 2019, down from 944 tonnes a year ago, said the source, who is not authorised to speak to the media.

In value terms, 2019 imports fell nearly 2% to $31.22 billion, he added.

Gold imports in December dropped 18% from a year ago to 60 tonnes, the source said, adding that in value terms, December imports fell 4.3% to $2.46 billion.

“We were expecting 2019’s demand and imports would surpass 2018. But as prices started rising from June onwards, retail demand moderated,” said a bullion division head of a private bank.

Gold futures in India hit a record high 39,885 rupees per 10 grams in September.

In the first half of 2019, India imported 564 tonnes of gold, while in the second half imports stood at 267 tonnes, government data showed.

Usually imports jump during the second half due to the wedding season as well as festivals such as Diwali and Dussehra, when buying gold is considered auspicious.

Gold imports in January could fall below 40 tonnes if the bullion prices remain elevated, said a Mumbai-based dealer with a bullion importing bank.

Gold prices jumped 1% to a four-month high on Friday as tensions flared in the Middle East after a senior Iranian military official was killed in a U.S. air strike, sparking safe-haven bids.

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