India’s H1 2017 Gold Imports Surpass 2016 Totals
India’s gold demand surged during the first half of 2017, as imports came in at 521 tonnes, beating the totals from the entire previous year.
Reasons for the climb were lower gold prices and preparations ahead of the new 3% goods and services tax (GST) that is being rolled out in July.
India imported 521 tonnes of gold during the first six months of this year, which is higher than the 510 tonnes of gold imported last year, Business Standard reported quoting GFMS Thomson Reuters.
The value of imports in H1 2017 equaled to $22.2 billion versus $23 billion for 2016.
“Large jewelry manufacturers have seen volumes higher than the monthly average through April to June. Investment-led demand has also turned stronger as there has been an increased interest to stash away cash in gold which many believe may be difficult post-GST. Our estimate is that at least one-third of the wedding related demand that comes up in the fourth quarter has been advanced,” said Sudheesh Nambiath, a senior analyst with GFMS Thomson Reuters.
Just to put things into perspective, gold imported by India on an annual basis during the past five years averaged around 709 tonnes, according to the data.
If the demand for gold holds up for the rest of the year, the annual total imported could beat 900 tonnes or $40 billion, which would mark the best results since 2012, Business Standard said.
Some experts believe strong demand will hold out, even despite the 3% GST. “Gold demand will continue to remain good even after the 3 per cent GST. In the next six months, gold imports could be 400-500 tonnes as demand from precious stones like diamonds could shift to gold,” Business Standard quoted Surendra Mehta, national secretary of India Bullion & Jewellers Association as saying.
Also, silver imports ticked up between January and June of this year, totaling about 3,050 tonnes, compared to 3,546 tonnes recorded during the entire previous year.