Gold imports plunged 86 per cent in June to 11 tonnes, against 78 tonnes in the year-ago period, on the back of high prices and weak demand. In value terms, June imports dropped to $609 million ($2.7 billion), said industry sources.

Imports have been falling consistently since the start of this fiscal, as the pandemic has ravaged the economy, leading to job losses across sectors. Most jewellery shops have remained closed, and those that reopened mid-April saw very few customer walk-ins as consumers had little reason to spend money on the luxury product, what with weddings being postponed.

Gold imports in May dropped 99 per cent to 1.3 tonnes (106 tonnes). In April, the shipments were just 0.06 tonnes (120 tonnes).

Gold prices had hit a new high of ₹48,886 per 10 gram on Wednesday as most State governments prepared for Unlock 2.0 even while restricting movement under Section 144. However, on Thursday, prices fell by ₹578 per 10 grams to ₹48,308 after opening weak at ₹48,490.

Lakshmi Iyer, Chief Investment Officer, Kotak Mahindra Asset Management Company, said gold has been on a dream run given the prevailing sentiment of risk aversion. The gold holding of ETFs (exchange traded funds) across the world is rising steadily and the momentum may continue. Gold prices may take smaller breathers, but as long as uncertainty on Covid prevails, prices will continue to move northward, she said.

Ajay Kumar, Director, Kedia Commodities, said investors booked profit and turned cautious on a gold rally as physical activity remained minimal due to the lockdown.

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