Gold imports may fall as curbs increase costs

Gold imports by India, the world's biggest consumer last year, may tumble in the second half as the government curbs shipments to contain a record current-account deficit and stem a slide in the currency.

Inbound shipments may drop 22 per cent to 372.5 tonnes in the six months through December from 478 tonnes a year earlier, according to a median of estimates from 10 importers, jewelers, analysts and trade groups compiled by Bloomberg. That may still boost full-year imports to about 902 tonnes from 860 tonnes in 2012, according to Bloomberg calculations based on data from the World Gold Council and the All India Gem & Jewellery Trade Federation.

Falling Indian demand for physical gold may deepen a bear market in bullion as some investors sell the metal amid signs of an improving US economy. Shoppers from India to China and Turkey crowded retail outlets to buy jewelry, coins and bars in April after the precious metal posted the biggest two-day loss in three decades. Goldman Sachs Group Inc says that gold will reach $1,050 by the end of 2014, while Credit Suisse Group AG forecasts $1,150 in about a year.

"I see no reason to buy more gold," said Bharti Chandra, a 38-year-old housewife, dressed in a salwar, who was selling an old necklace in Mumbai's Zaveri Bazaar, the largest bullion market in the country.