With demand being robust due to fall in gold prices, India’s import of the yellow metal in April-June period is expected to touch a record level at 300-400 tonnes, according to the World Gold Council (WGC).

Unprecedented levels of demand in the last quarter owing to lower gold prices have led to depletion of stocks in a number of key markets. Jewellery shops in China and India have run low or in some cases completely out of stock, it said. “In India, imports of gold are headed towards record levels in Q2 of 2013. We anticipate 300-400 tonnes of imports in the second quarter, as much as a 200 per cent year-on-year increase and almost half of total imports last year,” the WGC said in its market update for the second quarter of this year.

The country had imported only 153 tonnes of gold in the same period in 2012 calendar year as demand was lower because of record prices at that time.

Global gold prices have dropped sharply in mid-April from USD 1,535.5/ ounce to USD 1,390/ounce, it added.

Despite the price fall in April, the WGC’s research indicates that sentiment towards gold in the two largest markets is still extremely positive, with 70 per cent of consumers in India and China anticipating a stable or increasing price in the next 12 months. “Purchasing behaviour has been extremely strong, which indicates sustained demand over 2013 as a whole. While it is expected volumes will return to more normal levels, the momentum created in demand in Q1 and thus far in Q2 is likely to continue,” it observed.

Noting that the outlook for the remainder of 2013 is even more positive, the WGC said, “We anticipate record quarterly totals for the second quarter in India and China. Even if ETF (electronically traded funds) outflows continue, it is quite likely that gold previously held in the ETFs will find its way to Asian consumers taking a long-term view on gold.”

During the first quarter (January-March) of this year, there was very strong demand in the consumer markets for bars, coins and jewellery, the report said. “Purchases in India, China and the US were particularly strong. Consumer reaction to lower prices in the quarter was very positive and led to records being set in Chinese demand and in jewellery demand worldwide,” it said.

In India, consumers have flooded into the market, viewing the lower prices very much as a buying opportunity, with a sudden rise in jewellery sales reported from retailers across the nation. This was echoed in re-stocking by jewellers ahead of Akshaya Tritiya on May 13, it added.

Gold imports from India, the world’s largest consumer, are expected to increase to 900 tonnes in the current calendar year as against 860 tonnes in 2012.

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