April gold import estimated $3.5 bn

In May weather body forecasts of below normal monsoon will haunt gold demand

Gold imports continued to remain bouyant in April, despite fears that unseasonal rain and hailstorms would impact agricultural production, adversely affecting farmers’ income, leading to decline in demand for the yellow metal from rural India.

Trade sources said India’s total gold import in April is estimated at about 90 tonnes ($3.5 billion). In March, it was much higher at 121.8 ($4.98 billion) tonnes. But, that was because many traders and investors had delayed their purchases in previous months, expecting a cut in the import duty in the Budget. This did not happen. The gold import in April, 2014, was 58 tonnes.

Thanks to the suppressed demand in the past and demand surge on account of Akshaya Tritiya (21 April) resulted in higher demand in March and part of that demand spilled over to April also, said a CEO of listed jewellery company.

Rajiv Popley, director, Popley group, said, “Gold demand remained better even in April because marriage season demand was good and during Akshaya Tritiya days pre-booking was happening and after scrapping of 80:20 scheme, general sentiment among bullion traders have improved.”

While in April, higher imports might still be attributed to Akshaya Tritiya, in May, the demand might be impacted, as the Met department predicts a below-normal monsoon. Even the marriage season also coming to an end and the next two months are seen as a dull season for gold buying.

Popley added, “Rural demand has started moderating, which will lead to lower imports and down south markets it has already started.”