Indian gold imports may drop 15% in the fourth quarter
Gold imports by India, may drop 15% in the fourth quarter as the rupee’s fall to a record drives up domestic prices, according to Rajesh Exports .
“Overseas purchases may total 170 tonne in the three months ending December 31, compared with 200 tons in the preceding quarter,” chairman Rajesh Mehta said in a phone interview . The World Gold Council last week forecast fourth-quarter imports at more than 281 tonne.
A drop in Indian demand may help cool a 19% increase in bullion prices this year. Gold is rallying for an 11th year as investors seek to protect their wealth from volatility in stock markets, depreciating currencies and the threat of inflation.
“The weakening of the rupee makes domestic gold costlier,” said Mehta, whose Rajesh Exports is the nation’s biggest exporter of gold jewellery. “That may have some impact on the domestic demand and domestic consumers as such. Imports must come down because of rupee depreciation.” India’s rupee fell to a record today prompting the central bank to say it’s weighing action to stem the decline. The rupee dropped 0.8% to 52.5650 per dollar in Mumbai bringing its decline this year to 15%.
Gold demand in India surged 66% to 963.1 tons in 2010, while imports were a record 958 tons, according to the Word Gold Council.
Gold extended its gains on Tuesday and rose by R10 to R29,250 per 10 gm on a firming global trend and seasonal demand. However, silver continued its downward movement for the second straight session by falling R250 to R55,600 per kg.
The trading sentiment in gold remained firm on demand for the ongoing marriage season and reports of the precious metal rebounding from one-month low overseas, as investors sought to protect their wealth against financial market turmoil drivenby euro-zone debt crisis.
Gold in global markets, which normally sets the price trend on the domestic front, rose by 0.7% to $1,688.25 an ounce in Singapore, after falling to its lowest level since October 25.
Shifting of funds to surging stock markets for quick gains further influenced the market sentiment.
However, silver remained under pressure on selling by stockists and industrial units refrained from purchasing and look for better opportunity amid weakening global trend.
Gold of 99.9 and 99.5% purity gained R10 each to R29,250 and R29,110 per 10 gm. The metal had gained R35 in the previous session. Sovereigns held steady at R23,300 per piece of eight grams.
On the other hand, silver ready fell by R250 to R55,600 per kg, after falling R550 on Monday. Silver weekly- based delivery lost R125 to R55,060 per kg. Silver coins continued to be asked at previous level of R63,000 for buying and R64,000 for selling of 100 pieces. – FinacialExpress
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