India’s gold imports in November jumped 78 per cent from a month earlier to the highest level in five months as jewellers in the world’s second-biggest market for the metal restocked after a fall in prices, a government source said on Tuesday.
Higher imports by the South Asian country could support global prices that have risen more than 12 per cent so far in 2019, but could also widen India’s trade deficit and put pressure on the rupee. India fills nearly all of its gold demand through imports. India imported 71 tonnes of gold in November, compared with 40 tonnes in October, the source said on condition of anonymity as he was not authorised to speak to media.
Imports were down 16 per cent from November 2018, however, he added. Gold prices corrected after the Diwali festival, giving an opportunity for jewellers to replenish inventory, said Mukesh Kothari, director at Mumbai bullion dealer RiddiSiddhi Bullions. Indians celebrated the Dhanteras and Diwali festivals in October, when retail demand for gold peaks as it is considered auspicious and invokes lasting prosperity.
In November, local gold futures fell to 37,477 rupees ($522.18) per 10 grams after hitting an all-time high of 39,885 rupees in September.
In value terms, November imports totalled $2.94 billion, slightly higher than last year’s $2.76 billion, the source said.
Gold started trading at a premium in India to the official domestic price last month for the first time in 5-1/2 months on an improvement in demand from jewellers, which prompted refiners to increase gold dore imports, said a Mumbai-based bullion dealer at a gold importing bank. “Imports were not attractive for refiners until October due to massive discounts. As gold started trading in premium, they increased imports,” he said.