High prices to take toll on gold imports in December

Gold imports by India in December may decline from the previous month as demand wanes because of record prices.

Imports by the world’s biggest consumer may be as low as 30 tonnes, compared with 32 tonnes in November, according to provisional estimates from the Bombay Bullion Association, a group of 230 traders.

Gold has gained 24 per cent this year as US growth slumped during the longest recession since World War II, spurring demand for bullion as an investment haven. The price reached a record $1,227.5 an ounce on December 3.

“Demand will remain weak until prices decline,” Suresh Hundia, president of the association, said. “Unless prices fall even the marriage season will not be able to bring cheer to the market.” Prices must fall to at least Rs 15,000 per 10 gm from Rs 16,400, he said.

Immediate-delivery bullion gained as much as 1 per cent to $1,098.15 an ounce and was at $1,096.66 at 9.56 am in Mumbai.