India’s gold imports decline by 58.96%

India’s gold imports declined by 58.96 per cent to 270 tons from January to September from 658 tons that were shipped-in during the corresponding period of last year.

According to a report by the Associated Chambers of Commerce of India (Assocham), gold imports declined due to a prolonged strike by jewellers and continuation of 10 per cent custom duty on imports. The report of the industry body stated that smuggling of the yellow metal has been on the rise due to high custom duty, even as the industry demands a lower levy structure to encourage official imports.

India has been among the two biggest gold consumers in the world with average imports of more than 1,000 tons per annum reported in the recent past. Further, the industry body pointed-out that it expects gold prices to stay firm in the range of QA 30,500 33,500 per 10 grammes. The report said that gold prices are expected to remain firm in the backdrop of continuous global political and financial risks coupled with revival in demand in the domestic market. The prices have appreciated by about 25 per cent since January this year.

“The moot question among the buyers and analysts is whether scope for any further run is left when gold has seen so much of a rally, the best among all the assets classes – including quantitative easing led stock markets,” the research paper by Assocham said. “Revival in Indian consumption, financial risks in the Chinese economy, tapering tantrums of the US Federal Reserve as also close American Presidential elections are all seen as the push factors for the gold to remain as a safe haven.”

Currently, gold prices range from 31,000-31,500 for 24 carat purity in major Indian cities. “The upside in the short term of a few months is seen between 1,500-2,000, while the downside could be limited to 1,000- 2,000 per ten grammes.” D.S. Rawat, Secretary General of Assocham said, “Gold is finding a strong support levels in the international markets and is expected to stay above $1,200 mark, as a starting point for the next possible rally.”

“All in all, given the state of play in equity, debt and properties, gold would stand out for quite some time.” Rawat elaborated that negative interest rates by major global central banks have also led the investors to seek refuge in gold. “The outlook for the precious metal remains upbeat taking into consideration several factors including reduced pace of the US Fed rate hikes, increased adoption of negative interest rates most recently in Japan, increased inflows in gold ETFs (equity trade funds) and decline in gold production,” Rawat added.

Meanwhile, India’s steel imports declined by 37.3 per cent in the first six months of the current fiscal and exports rose by 35.6 per cent in the same period, according to an official report. “Import of total finished steel at 3.594 million tons (mt) in April-September 2016-17 declined by 37.3 per cent over same period of last year. Export of total finished steel was up by 35.6 per cent in April-September 2016-17 (3.03 mt) over same period of last year,” said the reports of the Steel Ministry’s Joint Plant Committee.

Courtesy: Gulf Today