Gold imports dip as demand wanes

Gold imports by India, the biggest buyer, dropped 18 per cent last year as record prices lowered demand from jewelers and housewives, a traders’ group said. 

Overseas purchases were 343 tonnes in 2009, compared with 420 tonnes in 2008, according to data from the Bombay Bullion Association. Imports in December jumped to 34 tonnes from 3 tonnes in the year-earlier month, the data shows. 

Gold posted its ninth annual gain last year on speculation that the dollar will extend a slump, spurring demand for the metal as an alternative investment. The metal rose to a record $1,227.50 an ounce on December 3. 

“Indians are slowly getting used to the high gold prices and that should sustain demand,” said Amar Singh, an analyst with Angel Commodities Broking. “There’s a consensus that gold prices will stay high because of inflationary pressures and a weakness in dollar.” 

Immediate-delivery gold advanced as much as 0.4 per cent to $1,132.68 an ounce and traded at $1,129.69 at midday in Mumbai. The metal slumped 2 percent yesterday after the People’s Bank of China ordered banks to raise the amount of deposits they must put aside as reserves by 50 basis points starting January 18.