Gold imports may revive, touching 150-200 tonne by Diwali, owing to anticipated traditional buying of gold over the next two months. One of the major reasons for increase in imports relates to the reduction in global gold prices. Gold prices fell to $808 per ounce on Tuesday, down by 21% from the year?s peak-price of $1023.50 recorded on March 17, 2008.
?Banks and private firms have geared up their buying of gold coins and kilo bar to supply the retail dealers and jewellery shops. There is a shortage of gold coins and kilo-bar in the domestic market,? Bhargav Vaidya, a leading gold analyst told FE.
Gold imports had dropped to 50-55 tonne over the past two month as prices were on the rise and demand for gold jewellery in the country was sluggish. Vaidya said that if crude oil price breaks the $110-level, gold prices may fall to $780.
Gold standard in the local market reached Rs 11,300 per 10 gm on Tuesday, down by nearly Rs 500 from the previous day. With prices at the current level, jewellery shops and retail dealers may start rebuilding their inventories ahead of festival demand and the wedding season, sources said.
?The gold market is very tight. I expect some correction. Weaker crude oil prices have resulted in lower trend in bullion prices,? Prithivraj Kothari, a leading gold dealer said.
For the month of August, traders expect gold imports to reach 80-100 tonne. ?This year, demand for gold coins may go up as investors prefer small coins, ranging 1 gm to 10 gm,” Kothari added.
India imported about 720 tonne gold in 2007, below the 1,000 tonne import expected by the world gold council.