India’s gold imports hit multi-decade low; higher premiums may follow, says Metals Focus

Harshal Barot, Senior Consultant – South Asia & Middle East at Metals Focus, said strong gold imports seen earlier this year helped jewellers and traders meet demand during April despite the lowest imports in decades in the month. However, with two straight months of weak inflows, pressure is now beginning to show in the domestic market.“Gold is at a premium of around $15 to $16 in the domestic market,” Barot said, adding that the trade is beginning to feel supply tightness.

Barot said the India International Bullion Exchange (IIBX) remains the primary route for gold imports at present, but import volumes are still far below normal trade levels, with only around 1.5-1.8 tonnes coming in through the exchange in recent weeks.
India’s gold imports in April dropped to a near 30-year low, outside the COVID period, as import restrictions and operational delays continued to weigh on the market.
Gold imports dropped to 20-22 tonne in March and are estimated at only 15 tonne for April from nearly 100 tonne in January and 65-66 tonne in February.

The same trend is visible in silver imports as well. Metals Focus said silver imports have also dropped sharply because banks are currently not importing the metal, leaving the IIBX as the only active channel for supply into the country.

The firm believes the current situation is manageable only because this is traditionally a slower demand period for jewellery purchases in India. However, risks could rise sharply if demand improves due to price movements or ahead of the festive and wedding season later this year.

For full interview, watch accompanying video

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