India’s gold imports fell for a fourth straight month in April from a year ago to 57 tonnes on subdued demand after local prices jumped to the highest level in nearly 21 months, provisional data from precious metals consultancy GFMS and bank dealers showed.
The drop in purchases by India, though, could weigh on global prices, which are still up nearly 6% from a mid-December trough, despite dropping back from a 17-month high hit at the end of January. Lower gold imports could also help the country reduce its trade deficit.
The price rise curtailed retail purchases and also prompted jewellers to postpone restocking, Sudheesh Nambiath, a senior analyst with GFMS, a division of Thomson Reuters, said. Local gold prices jumped to their highest in 21 months in April following gains in the overseas market.
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The drop in the rupee to the lowest level in 14 months in April made gold even more expensive for retail buyers and squeezed demand, said Abhishek Bansal, promoter of ABans Jewels Pvt. Ltd., which runs a gold refinery.
India imported 93.6 tonnes of gold in April 2017. Gold imports in the January to April period fell 34% from a year ago to 220.1 tonnes, GFMS data showed.
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In April, Indians celebrated Akshaya Tritiya, during which buying of gold is considered auspicious. “Price rise weighed on Akshay Tritiya demand,” said a Mumbai-based gold dealer. India’s imports in May would be higher than April, but would be significantly lower than the 119.3 tonnes imported in May 2017, said a Mumbai-based head of the gold trading desk at a private bullion importing bank.