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December gold imports to halve as cash crunch squeezes demand

Reuters  |  MUMBAI 

By Rajendra Jadhav

(Reuters) - India's overseas purchases of could halve this month after jumping to the highest level in 11 months in November because retail demand has faltered due to the government's move to scrap high-value currency notes, industry officials told Reuters.

Lower by the world's second-biggest consumer of could weigh on global prices that are already trading near their lowest level in 10 months, although it would likely help the South Asian country trim its trade deficit.

"In December could fall below 50 tonnes. Retail demand is very weak due to the crunch," Bachhraj Bamalwa, director of the All Gems and Jewellery Trade Federation, told Reuters.

The November jumped to around 100 tonnes, highest since December 2015, Bamalwa said, as people with unaccounted wealth rushed to buy bullion following Indian Prime Minister Narendra Modi's shock withdrawal of 500 and 1,000 rupee banknotes to fight graft and "black money".

The Indian has also put strict limits on the amount of money people can withdraw from banks, although a larger sum, 250,000 rupees ($3,660), is allowed for weddings - a big driver of demand for - as long as participants can prove that the marriage is genuine.

Anticipating curbs on imports, banks and other nominated agencies ramped up overseas purchases in mid-November, but demand plunged by the third week of the month due to the shortfall of currency notes, dealers said.

"A significant chunk of November are still unsold. Import requirement for December is limited," said Sudheesh Nambiath, a senior analyst at metals consultancy GFMS, a division of Thomson Reuters.

Indian jewellers rely on the wedding season for an uptick in demand during winter months after the end of key festivals such as Diwali. Weddings accounts for more than half of the country's annual demand for gold, according to GFMS.

But the difficulties of getting enough have hit wedding demand hard and forced many consumers to exchange old jewellery for new, says Kumar Jain, vice president of the Jewellers Association.

"The demand will remain low for the next few months. It will take time to recover."

($1 = 68.3600 Indian rupees)

(Reporting by Rajendra Jadhav; Editing by Tom Hogue)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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December gold imports to halve as cash crunch squeezes demand

MUMBAI (Reuters) - India's overseas purchases of gold could halve this month after jumping to the highest level in 11 months in November because retail demand has faltered due to the government's move to scrap high-value currency notes, industry officials told Reuters.

By Rajendra Jadhav

(Reuters) - India's overseas purchases of could halve this month after jumping to the highest level in 11 months in November because retail demand has faltered due to the government's move to scrap high-value currency notes, industry officials told Reuters.

Lower by the world's second-biggest consumer of could weigh on global prices that are already trading near their lowest level in 10 months, although it would likely help the South Asian country trim its trade deficit.

"In December could fall below 50 tonnes. Retail demand is very weak due to the crunch," Bachhraj Bamalwa, director of the All Gems and Jewellery Trade Federation, told Reuters.

The November jumped to around 100 tonnes, highest since December 2015, Bamalwa said, as people with unaccounted wealth rushed to buy bullion following Indian Prime Minister Narendra Modi's shock withdrawal of 500 and 1,000 rupee banknotes to fight graft and "black money".

The Indian has also put strict limits on the amount of money people can withdraw from banks, although a larger sum, 250,000 rupees ($3,660), is allowed for weddings - a big driver of demand for - as long as participants can prove that the marriage is genuine.

Anticipating curbs on imports, banks and other nominated agencies ramped up overseas purchases in mid-November, but demand plunged by the third week of the month due to the shortfall of currency notes, dealers said.

"A significant chunk of November are still unsold. Import requirement for December is limited," said Sudheesh Nambiath, a senior analyst at metals consultancy GFMS, a division of Thomson Reuters.

Indian jewellers rely on the wedding season for an uptick in demand during winter months after the end of key festivals such as Diwali. Weddings accounts for more than half of the country's annual demand for gold, according to GFMS.

But the difficulties of getting enough have hit wedding demand hard and forced many consumers to exchange old jewellery for new, says Kumar Jain, vice president of the Jewellers Association.

"The demand will remain low for the next few months. It will take time to recover."

($1 = 68.3600 Indian rupees)

(Reporting by Rajendra Jadhav; Editing by Tom Hogue)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22

December gold imports to halve as cash crunch squeezes demand

By Rajendra Jadhav

(Reuters) - India's overseas purchases of could halve this month after jumping to the highest level in 11 months in November because retail demand has faltered due to the government's move to scrap high-value currency notes, industry officials told Reuters.

Lower by the world's second-biggest consumer of could weigh on global prices that are already trading near their lowest level in 10 months, although it would likely help the South Asian country trim its trade deficit.

"In December could fall below 50 tonnes. Retail demand is very weak due to the crunch," Bachhraj Bamalwa, director of the All Gems and Jewellery Trade Federation, told Reuters.

The November jumped to around 100 tonnes, highest since December 2015, Bamalwa said, as people with unaccounted wealth rushed to buy bullion following Indian Prime Minister Narendra Modi's shock withdrawal of 500 and 1,000 rupee banknotes to fight graft and "black money".

The Indian has also put strict limits on the amount of money people can withdraw from banks, although a larger sum, 250,000 rupees ($3,660), is allowed for weddings - a big driver of demand for - as long as participants can prove that the marriage is genuine.

Anticipating curbs on imports, banks and other nominated agencies ramped up overseas purchases in mid-November, but demand plunged by the third week of the month due to the shortfall of currency notes, dealers said.

"A significant chunk of November are still unsold. Import requirement for December is limited," said Sudheesh Nambiath, a senior analyst at metals consultancy GFMS, a division of Thomson Reuters.

Indian jewellers rely on the wedding season for an uptick in demand during winter months after the end of key festivals such as Diwali. Weddings accounts for more than half of the country's annual demand for gold, according to GFMS.

But the difficulties of getting enough have hit wedding demand hard and forced many consumers to exchange old jewellery for new, says Kumar Jain, vice president of the Jewellers Association.

"The demand will remain low for the next few months. It will take time to recover."

($1 = 68.3600 Indian rupees)

(Reporting by Rajendra Jadhav; Editing by Tom Hogue)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

image
Business Standard
177 22

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