India’s October gold imports surged 60 per cent from a year earlier to a 31-month high as a drop in prices ahead of a key festival prompted jewellers to ramp up purchases, a government source said yesterday.
Higher imports by the world’s second-biggest bullion consumer could support benchmark gold prices, but may also widen India’s trade deficit and put pressure on the ailing rupee.
India imported 123 metric tons of gold in October, compared with 77 tonnes a year earlier, the source said.
The average monthly imports in October in the past decade were around 66 tonnes.
In value terms, October imports nearly doubled to $7.23 billion from $3.7bn a year earlier, he said.
At the start of October, local prices fell to their lowest level in seven months, providing an opportunity for jewellers to stock up for festivals, said a Mumbai-based bullion dealer with a private bank.
“Jewellers were operating with lower stocks and were eager to replenish at the reduced price levels observed in October,” he said.
Indians celebrated the Hindu festival Dussehra in October and Diwali last week, when buying gold is considered auspicious.
Local gold futures jumped to a record high of 61,914 rupees per 10 grams in November, but demand remained robust during Diwali, said Amit Modak, CEO at jeweller PN Gadgil and Sons in the city of Pune.
There was strong demand for coins and bars as people viewed gold as a long-term investment product, leading to increased purchases, he said.