The Hindu Business Line : October gold imports down 27%

Mumbai, Nov. 5 Sharp fall in the value of the rupee against the dollar has taken a heavy toll on gold imports even as prices came down on eve of Diwali and Dhanteras - the two occasions when buying gold is considered auspicious.

Gold imports fell 27 per cent to 44 tonnes in October against 60 tonnes registered in the same period last year. It was down 45 per cent compared to imports of 64 tonnes in September. The rupee depreciated 9 per cent against the dollar from 47.95 to 52.35 in October.

Mr Harish Galipalli, Head of Research, Karvy Commodities, said the sharp fall in prices was not enough to rejuvenate demand in the festival season due to the economic slowdown and liquidity crisis. Prices fell from Rs 13,200/ 10 gm to Rs 11,795/10 gm on October 30, a drop of 11 per cent.

Mr Navin Mathur, Head of Research, Angel Commodities, said volatility in the prices also forced many importers to postpone their shipments. “Prices on the London Metal Exchange swung by $40-$50 an ounce in a day on a few occasions in October, while in the domestic markets it fluctuated between Rs 800 and Rs 1,000/ 10gm baffling investors,” he added.

The annual gold demand in India is about 850 tonnes; it slid to 727 tonnes in 2007 due to a sharp rise in prices. Given the economic turmoil, the demand is expected to fall further in 2008, said an analyst.

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