India Increased Gold Import Massively By 658%, What Should We Understand?

India has increased its gold imports in September by a massive 658% than 2020’s lower base. The international gold prices are quite volatile at present and dropped considerably in both August and September. It is being anticipated that corrections in local prices to the lowest level in the last few months have prompted the Indian jewellers to increase their gold purchases for making more ornaments. On average Indian gold, rates slipped by 2.11% in August while slipped by 4.08% in September, in line with the global prices. Hence, massive import in September was certainly profitable for the country as the prices are again hiking to the earlier levels in October. Indians celebrate multiple auspicious festivals in October and November, so the increase in gold storage will help the country’s economy in both ways – in terms of pricing and reserve.

Gold import figure in September

In September, Indian jewellers have imported around 91 tonnes of gold, while they have imported around 12 tonnes of gold in the last year. Hence, monetarily, in the month, gold imports hiked to $5.1 billion, from $601 million in the last year, according to a Kitco report. This translates that in the September quarter, gold imports by India have gained by 170% than 288 tonnes in the earlier year. This additionally proves that the demand of physical gold is again improving in the domestic markets.

When some of the investors and mostly the traders were concerned about gold prices in the international markets, Indian gold jewellers kept faith in the metal’s ability to soar again. September has been a very uncertain month for the US economy in terms of their inflation, employment data. These factors kept gold prices down. On the other hand, INR was appreciating at that time, which helped Indian buyers to buy more gold from the foreign markets.

Good time for Indian jewellers

This will pay the Indian jewellers better now, as the US debt ceiling figures are concerning the US dollar index, coupled with a pressured equity market and around 1.9% hike in the US 10 years treasury yields. These are again hiking gold prices globally. So, Indian jewellers will be able to sell their gold jewelleries at far better prices in October, in the festive season. The international gold prices again started to cross the $1765 levels which can also improve later. Along with this, Indian daily gold rates are also being quoted around Rs. 45,500/10 grams again. The Mumbai MCX gold in October future was quoted at Rs. 46361/10 grams till 4.49 PM IST, on October 4. These are affirmative signals for Indian gold importers.