New Delhi [India], May 16 (ANI): In April, India saw a notable rise in gold imports, more than doubling to USD 3.11 billion from USD 1.53 billion in March. During the period gold price ranged between Rs 76,400 and Rs 67,755 per 10 gms in Delhi.
Despite strong gold demand in March, the market saw an unexpected downturn as jewellers stocked up for the Indian wedding season. However, demand revived in April because of marriage season and buying of gold by the central bank, marking a significant turnaround.
A senior government official told ANI that doubling of gold import in April is not abnormal and it aligns with the trends of last 10 years. The surge is also because of heightened global demand of gold due to geo-political tensions, resulting in increased gold prices. He also said that various central banks globally are increasing their gold reserves in light of these uncertainties.
The World Gold Council’s Q1 2024 Gold Demand Trends report adds to the argument, ” Central banks continued to buy gold apace, adding 290t to official global holdings during the quarter. Consistent and substantial purchases by the official sector highlight gold’s importance in international reserve portfolios amidst market volatility and increased risk.”
The commodity market experts also agree that the increased gold import could be combination of multiple factors such as geopolitical tensions, steady central bank purchases, and robust demand from emerging markets.
Amit Goel, Co-Founder and Chief Global Strategist, Pace 360 said, “March saw a significant drop in gold imports due to high prices. This could be a contributing factor to the rise in April, reflecting a return to normal buying patterns after a price-induced slowdown. In India, April marks the beginning of the wedding and festival season, which typically sees a surge in gold demand for jewellery purchases. This seasonal upswing could explain a portion of the increased imports.”
Manish Chowdhury, Head of Research, StoxBox added, “The shifting global power dynamics, exacerbated by trade tensions and economic uncertainties, further strengthen gold’s safe haven appeal. With concerns over inflation management strategies and potential stagflation risks in the US, investors are increasingly turning to gold as a hedge against uncertainty.”
Higher gold imports are also being cited as one of the reasons for five-month high trade deficit of USD 19.1 billion. Total gold imports during 2023-24 surged 30 per cent to USD 45.54 billion. (ANI)
