MUMBAI: The global market turmoil is beginning to have a telling effect in the gold imports to India, the largest importers and consumer of the yellow metal in the world.
The Bombay Bullion Association said on Thursday that India’s gold imports have plunged by an unprecedented 90 percent. The Association said gold imported dipped to a paltry 1.2 tonnes in January 2009 compared to the 18 tonnes in January 2008.
The Association said following high prices and the global meltdown impact, physical buying of god has been hit hard in India. India's imports of gold have seen a drastic fall.
Gold import has also come down in India because of the fall in demand. Gold imports in India for 2008 dipped almost 47% to 402 tonnes.
Experts blamed high prices for the huge fall in gold imports. The December 2008 gold imports stood at only 3 tonnes against 16 tonnes in December 2007.
The economic turmoil has also hit the demand for luxury goods and hence the demand for jewellery has fallen considerably.
Buying remained dull and prices remained high on global cues.
Although the gold market fundamentals look excellent, investors have been struggling for survival and in this attempt have sold even their gold and silver positions.
As a result, gold prices have dropped continuously till it hit $680/ounce levels. As compared to equities or other commodities, the percentage fall in gold prices has been lesser.
If the downward scenario continues and there is deflation, gold would do well as asset value drops because of fear and distrust in the system.
Gold prices are running around Rupees 14,000-mark these days, prompting many customers to wait for the prices to cool for any more gold purchases. Gold in India's commodity futures market is also running around and above Rupees 14,000-levels.
Source : CommodityOnline