India Gold Imports Said to Jump 582% on Festival, Wedding Demand

Gold imports by India are said to have jumped almost seven-fold in March from a year earlier as jewelers stocked up anticipating a demand recovery during the wedding season that began this month and the auspicious Hindu gold-buying day of Akshaya Tritiya.

Shipments advanced 582.5 percent to 120.8 metric tons last month from a year earlier, according to a person familiar with provisional data from the finance ministry, who asked not to be identified as the data aren’t public. Imports dropped 20 percent to 716.4 tons in the year ended March 31. Finance Ministry spokesman D. S. Malik declined to comment on the data.

Consumption in India, the world’s second-biggest gold buyer, has been recovering after a falling to the lowest level in seven years in 2016. A strike in March last year after a levy was introduced on jewelry produced and sold in India reduced consumption that was further dented by the government’s decision to withdraw high-denomination currency notes. March usually sees a spurt in gold imports due to warehouse clearance and re-stocking, the person said.

“Imports were down till January due to demonetization, so now people are re-stocking,” Mehul Choksi, chairman of jewelry store chain Gitanjali Gems Ltd., said by phone from Mumbai.

Trade data in India has been encouraging so far and suggests that the challenges to purchases due to demonetization are probably fading faster than initially anticipated, UBS AG said in a report on April 5. Purchases are expected to pick up heading into the Akshaya Tritiya festival that falls toward the end of April this year, while import data for the next couple of months will be a good gauge of underlying demand, according to the report.

Indians buy gold during festivals and for marriages as part of the bridal trousseau or as gifts, and the nation imports almost all the gold it consumes.

Bloomberg

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Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

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