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Commerzbank: Indian gold demand 'at rock bottom'

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(Kitco News) - Gold demand in India was still “at rock bottom” in May, said Commerzbank. Analysts cited reports saying India’s gold imports were a mere 1.4 metric tons last month. This was a 99% decline from the 133.6 tons imported in the same month a year ago. Data already showed that April imports ground to a virtual halt. “The suspension of international flights and the nationwide lockdown to contain coronavirus are still visibly taking their toll, in other words,” said Commerzbank analyst Carsten Fritsch. “Whether the pent-up demand will be released later in the year is questionable, to say the least. At present, nobody can predict what will happen to consumer behavior in India once the lockdown is lifted. Even if weddings are possible again in the autumn, the record-high local prices are likely to ensure that less gold jewelry is given as gifts.” Because of weak Asian demand, the gold market has been relying on exchange-traded-fund inflows, which continued again on Tuesday, Fritsch commented.

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