After 50 tonnes in January, February saw 80 tonnes of import; demand has continued in March, keeping jewellers busy. The industry estimate is 200 tonnes in the year’s first quarter.
The December quarter saw import of 214 tonnes, mostly because of high demand during Diwali and the post-demonetisation period.
Shekhar Bhandari, senior executive vice-president at Kotak Mahindra Bank, said: “Demand for gold has picked up. With a falling dollar index and a rising US gold price, the price in India has become attractive with an appreciating rupee. With the Akshay Tritiya festival in the fourth week of April, one should see continued demand over the next five to six weeks.”
Marriage-related buying is also back with cash availability having improved for small consumers. Banking channels and cards are being widely used.
Nigam Arora, a noted investor, says: “Gold these days is more influenced by India and China. This demand shows recovery.”
On prices, he said, “The US Fed's decision to raise rates is not simply the central bank’s latest interest rate increase but a statement indicating a series of rapid increases. This was the first time since the financial crisis that the Fed was definitive about raising interest rates quickly. Those who are positioning now for gold to go down can get squeezed, and as a result of short covering, gold and silver have the potential to scream higher. Aggressive traders may consider buying gold for a short-term trade.”
The government’s Gold Monetisation Scheme and Sovereign Gold Bond scheme have together collected 22 tonnes. Of this, “six tonnes have come under the GMS since November 2015 and 16 tonnes of gold bonds, including the one which closed recently”, according to an official of the ministry of finance. This meant two tonnes of SGBs were sold in the latest issue.
Zaveri Bazar here saw standard gold closing Rs 40 higher at Rs 28,530 per 10g on Monday. The global price was $1,231 an ounce.
Silver in Mumbai closed marginally up by Rs 55 to close at Rs 41,380 per kg; abroad, it was trading at $17.38 an oz.