India's gold
imports in September dropped more than 14 percent from a year ago as a rally in
local prices due to a depreciating rupee reduced demand in the world's
second-biggest consumer of bullion, provisional data from precious metals
consultancy GFMS.The drop in demand from Indian importers could weigh on global
prices, which have dropped 8.8 percent so far this year.But lower imports could
help the South Asian country reduce its trade deficit and support the rupee,
which hit a record low this week.
"In August demand was good
but it fell in September due to higher prices," said Asher O., managing
director of the India operations at Malabar Gold and Diamonds, a leading
jeweller.
The Indian rupee has fallen
almost 14 percent in 2018, lifting local gold prices to 31,531 rupees per 10
grams earlier this week, the highest level in nearly five months.India's gold
imports in August nearly doubled from a year ago to 85.7 tonnes to hit their
highest level in 15 months as lower prices prompted manufacturers to stock up
for a jewellery exhibition.But jewellers were carrying ample inventory from
August and retail demand was also weak due to Shradh period - a fortnight for
paying homage to ancestors - in September, said a Mumbai-based dealer with a
private bullion importing bank.
Shradh ended on Oct. 8, giving
way to a string of festivals."In October, again imports will rise due to
festivals," said Bachhraj Bamalwa, a bullion dealer based in Kolkata,
formerly the Chairman of the All India Gems and Jewellery Trade Federation.Demand
for gold usually strengthens at the end of the year on purchases for the
traditional wedding season and major festivals including Diwali and Dussehra,
when bullion buying is considered auspicious.Investment demand has also started
to improve due to a falling stock market and the depreciating rupee, said a
bullion dealer based in southern Indian city Chennai."Investors are not
sure how much the rupee can fall. That's why they are hedging risk by investing
in gold," the dealer said.For the first nine months of 2018, Indian gold
imports fell 15 percent from a year earlier to 552.8 tonnes, data compiled by
GFMS showed.
Source: https://economictimes.indiatimes.com/