India’s gold imports in March rose 471% from a record high last year to 160 records, a government source told Reuters on Thursday, as lower tariffs and higher price adjustments attract buyers and sellers of jewelry. The world’s second-largest consumer imports could support gold prices, adjusting about 17% from a high of $ 2,072 by August 2020.
Increased imports could increase India’s trade deficit and push the rupee. India recorded a record 321 tons in the quarter of March, up from 124 tons last year, a source said. The source requested anonymity as he was not authorized to speak to the media. In terms of value, March’s revenue reached $ 8.4 billion from $ 1.23 billion last year, he said.
In February, India reduced its import duty on gold to 10.75% from 12.5% to increase retail demand and reduce smuggling in South Asia. “Many buyers have been reluctant to buy because of the high prices. They rushed to buy after the prices were well adjusted,” said Harshad Ajmera, owner of JJ Gold House, a senior manager in Kolkata city.
In March, the future of local gold reached a one-year low of 43,320 rupees per 10 grams. Manufacturing stone merchants are building goods after seeing strong purchases, says a Mumbai bullion dealer who owns a gold import bank. “Every month the gold was sold at a premium because of the demand for jewelery,” said the merchant. Last month retailers charged up to $ 6 ounce premiums in addition to the official domestic prices, including 10.75% import and 3% sales tax.
Gold imports to India in April could be as low as 100 tonnes as miners fear the government could force them to ban coronavirus, said a trader. India has reported 72,330 new cases of COVID-19 overnight, data from the health department showed on Thursday, the highest figure since October 11.