India’s gold imports rise by 300% in August

Is India’s gold market headed for a bigger demand boom? It seems so as the gold imports witnessed nearly a three-fold jump during August at 21.8 tonnes as compared to the previous month on rising investment demand with the onset of festival and marriage season.

The import of the precious metal was 7.8 tonnes in July this year. According to analysts, people are probably waiting for prices to come down from the Rs 15,000 per 10 gm level, with reports suggesting a further rise in prices.

However, in August 2008 the imports were much higher at 98 tonnes just before recession was officially declared and the domestic demand slipped.

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.

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.

The import of the precious metal is likely to go up for the next 2-3 months as people will invest their money in the yellow metal for better returns.

However, by the end of the year the trend is likely to decline. The rise in imports can be attributed to jewellers wanting to stock up before the beginning of ‘Diwali’ demand.

With a bullish trend in gold there is also a rise in investor demand at higher levels giving rise to the import of the yellow metal.