After Nov festive high, gold imports to plunge this month

India’s gold imports are poised for a sharp slowdown in December following record purchases in November, in the absence of any major festival and as rebounding prices prompt buyers to delay purchases, trade and government officials said.

Lower imports by India, the world’s second-biggest consumer of the precious metal, could cap a rally in global prices that hit a record high in October. The drop in imports could also help India narrow its trade deficit and support the ailing rupee.

“Last month, imports shot up thanks to strong demand for investment and jewellery,” Prithviraj Kothari, president of the India Bullion and Jewellers Association (IBJA), said.

“But now, things are cooling off, and imports are slowing down. We might see a drop of over 50 per cent in December.” Gold imports more than doubled in November compared to the previous month, reaching a record $14.8 billion, which widened the trade deficit to a record level and pushed the rupee to an all-time low.

Many potential buyers had been waiting for gold prices to drop and rushed to make purchases as soon as prices corrected in November, said a Mumbai-based dealer with a private bullion importing bank.