Imports may touch 12-month low

Gold imports may reach a 12-month low of 15-17 tonnes in May . Rising prices have slowed the momentum seen in gold imports.

In April, imports were estimated at 34 tonnes against 188 tonnes in the January-March quarter. The World Gold Council (WGC) report said net imports in first three months of the year were 188 tonnes.

This is due to sharp increase in prices of the yellow metal in the last one-and-a-half months and market participants expect imports may remain subdued for some time if there is no correction in prices.

According to Suresh Hundia, president of the Bombay Bullion Association, “Imports in May are expected to be 15-17 tonnes. Such low imports were last seen in the first quarter of 2009. At higher prices, traders deos not have much business.”

Hundia says, “Traders and investors are booking profit in gold as of now.” In the bullion market activities are confined to recycled gold.

“If prices continue to remain high, demand would be affected and imports could slow down,” said Bhargav Vaidya, a bullion analyst.

Gold prices fell from their record level in the national capital today, losing Rs 40 to Rs 19,010 per 10 gm, on reduced offtake at existing higher levels amid a weakening global trend.

Investors shifting from bullion to rising stock markets also influenced the trading sentiment to some extent, traders said.

Gold in overseas markets, which normally set the price trend on the domestic front, was traded 0.2 per cent lower at $1,223 an ounce. Pure gold (99.9) fell by Rs 40 to Rs 19,010 per 10 gm. However, gold of 99.5 per cent purity gained Rs 10 to Rs 18,910 per 10 gm. Sovereigns held steady at Rs 14,650 per piece of 8 gm.