Gold imports will fall by 50 per cent to a 17-year low

Mumbai, Ta. 21 July 2020, Tuesday

The country's gold imports are expected to fall by 50 per cent in the current calendar year to a 15-year low due to the impact of the coronavirus and higher prices. The outbreak of coronavirus in the country has had a serious impact on gold imports and demand since March.

Gold prices have also risen in recent days as the global financial crisis has turned to investing in funded gold. Gold imports are expected to touch 40 tonnes in the current year, which will be the lowest level since 2006, an analyst said.

Lockdowns and epidemics have hit the country's jewelery industry and the demand arithmetic has changed. Recent figures show that those who are interested in gold are investing in ETFs and gold bonds instead of spot gold.

Due to the economic downturn, some people are selling gold to raise liquidity or putting it as collateral. Gold has returned more than 15 per cent to investors this year amid sluggish demand. In 2016, the country's gold imports were 8 tonnes. In the March quarter of the current calendar year, the import figure was only 2.50 tonnes, while in the June quarter, the import figure was only 11 tonnes. Imports are not encouraging even in July and will continue to decline in the current quarter.

In terms of gold import bill, it has come down to 4.5 billion in the first six months of 2020. Which has been the lowest since 2009. In the first six months of 2008, the import bill stood at ૭ 2.50 billion.

The impact of Corona on revenue has led to cuts in jewelery purchases by consumers, which has led traders to import only gold, the analyst added.

Gold ETFs have seen a net inflow of Rs 500 crore in the first six months of the current year, while July is the best month so far in terms of quantity and financial investment in gold under the Sovereign Gold Bond Scheme, according to government data.