India's Gold Imports Plunge For Fifth Month In A Row As Higher Prices Hurt Demand - GFMS
(Kitco News) - Gold imports by the world’s second largest consumer dropped for the fifth consecutive month in May to 48 tonnes, as higher local prices restrained consumer demand, said Thomson Reuters-owned metals consultancy GFMS.
The yellow metal prices hit a 21-month high last month, which limited retail demand for gold jewelry, said GFMS senior analyst Sudheesh Nambiath on Wednesday.
In comparison, gold’s global price is off its 17-month high seen in January and is trading below the psychological level of $1,300 an ounce. Spot gold on Kitco.com was last at $1.296.60, up 0.05% on the day and August Comex gold futures were at $1,301.30, down 0.01% on the day.
“[India’s] local prices jumped due to the depreciating rupee and dampened retail purchases,” Nambiath explained, adding that local prices are up more than 5% since the start of the year.
So far this year, India imported 274.2 tonnes, which is 39.4% lower than a year ago, according to GFMS.
Last year, India purchased 119.3 tonnes of gold in May alone, with jewelers busy stocking up prior to the introduction of the new 3% national sales tax that was introduced on July 1, 2017 to help with traceability of transactions.
One Mumbai bullion dealer told Reuters that there were fewer auspicious days for wedding in May due to the Adhik Mass, which is an extra month in the Hindu calendar that helps to align lunar and solar calendars.
Fewer weddings means that fewer people were buying gold, said RiddiSiddhi Bullions director Mukesh Kothari.
Prices also played a deterring role, Kothari added. ”Gold has been trading in discount in local market. Jewelers are not interested in building stocks at the current price.”