India Gold Imports Said to Jump to Year’s High in November
Gold imports by India, the second-biggest consumer, climbed 10% in November to the highest this year. Demand increased as jewelers built up stockpiles for the marriage season.
Overseas purchases rose to 111 tonnes from 101 tonnes a year earlier. For the 11 months through November, shipments slumped 43% to 513.9 tonnes from the previous year.
Consumption is on track to drop to the lowest in seven years in 2016 because of higher prices, an excise tax on jewelry and the government’s push to bring more transparency to the financial system where gold is used as a home for undeclared income. Prime Minister Narendra Modi dealt demand another blow when he scrapped notes of higher denominations, reducing cash supply.
“Imports rose as jewelers restocked after Diwali,” Bachhraj Bamalwa, a director at the All India Gems & Jewellery Trade Federation, said, referring to the festival of lights. “There was bit of demand in the initial part of November because of demonetization, but after that there have been no purchases at all.” Imports will slide from this month as the cash crunch weakens demand, he said.
Indians have a tradition of buying bullion during festivals and for marriages. The country’s main festival season starts in August, concludes with Diwali, and is followed by the wedding season. The nation imports almost all the gold it consumes, and demand was 858 tonnes in 2015.