Gold Imports by India Jump as Jewelers Buy Despite High Prices
Gold Imports by India Jump as Jewelers Buy
Despite High Prices
February 12, 2019
Gold imports by India rose last
month despite local prices trading near the highest in more than five years, as
jewelers start to restock for the wedding season.Inbound shipments grew 64
percent to 46 tons in January from a year earlier, according to a person
familiar with the data, who asked not to be identified as the figures aren’t
public. However, higher prices kept a lid on supplies, which were lower than
the 60 tons shipped in December. Finance Ministry spokesman D.S. Malik wasn’t
immediately available for comment.Indians consider buying gold auspicious for
marriages as part of the bridal trousseau or to be given as a gift in the form
of jewelry. The wedding season starts this month and purchases will jump during
the second-biggest gold-buying day of Akshaya Tritiya in early May.
The World Gold Council, a
London-based promotion body, expects a recovery in demand in India this year on
increased spending with elections due by May. “Elections mean expenditure,
which means redistribution of income,†Managing Director for India P.R.
Somasundaram said last month.Steps in this direction have already been seen by
the Indian Prime Minister Narendra Modi’s populist push in his final budget
on Feb. 1 before the elections. The government will allocate 750 billion-rupee
($10.6 billion) a year in a cash handout plan for about 120 million farmers and
give taxpayers 185 billion rupees of tax relief in the year to March 2020.Last
year “wasn’t great as far as Indian imports were concerned, largely because
of depleting rural income and higher prices due to weaker rupee,†said Harish
Galipelli, head of commodity and currencies at Inditrade Derivatives &
Commodities Ltd. “But, given the direct cash benefits to farmers and
elections round the corner, there could be increased liquidity among the rural
population and that may drive demand this year.â€However, a key risk to demand
growth prospects remain the higher domestic prices as Indians are highly price
sensitive, he said. Benchmark gold futures in Mumbai rose to 33,646 rupees
($472) per 10 grams on Feb. 4, the highest since September 2013 and just below
a record of 35,074 rupees touched the same year.
Shares of India’s biggest
branded jeweler by value, Titan Co., erased losses and were trading at 1,053 rupees
Monday in Mumbai, after dropping as much as 0.8 percent to 1,045 rupees
earlier.
Source: https://www.bloombergquint.com
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