India’s November gold imports nearly halve on higher prices: GFMS

 India’s gold imports in November nearly halved from a year ago as a rise in the price of the yellow metal curbed retail buying for weddings, industry officials and analysts said on Wednesday.

A drop in gold purchases by India, the world’s second-biggest consumer after China, could weigh on global prices that are already trading near their lowest in two months.

Imports in November were around 55 tonnes, a sharp fall from last year’s 100.6 tonnes, provisional data from GFMS showed.

“After Diwali demand tapered off. The price rise dampened retail buying for weddings,” Sudheesh Nambiath, a senior analyst with GFMS, a division of Thomson Reuters, said.

Tracking overseas markets, local gold prices surged to 29,745 rupees ($ 461.34) per 10 grams in mid-November, an 8.4 percent rise since the start of 2017.

In October India celebrated the Diwali festival, when buying bullion is considered auspicious.

“In November the local demand was so weak that prices were trading at a discount,” said Mukesh Kothari, director at bullion dealer RiddiSiddhi Bullions in Mumbai.

Dealers in India were offering a discount of up to $ 2 an ounce in November over official domestic prices, which include a 10 percent import tax.

The fall in November imports looks steep as last year imports had surged after the government abolished two high-value currency notes to fight “black money”, said the head of the bullion division at a Mumbai-based gold importing bank.

Imports are likely to remain weak even in December as jewellers are cautiously replenishing inventory, the bank official said.

India had imported 50 tonnes gold in December 2016.

India’s gold consumption is likely to drop to its lowest in eight years in 2017, hit by government moves to make bullion trading more transparent and by faltering demand from some rural areas, the World Gold Council (WGC) said last month.