Lower imports by India, the world’s second biggest consumer of the precious metal, could limit a rally in global prices that hit a record high earlier this month on expectations that the Federal Reserve will cut interest rates this year.
India’s gold imports are set to plunge by more than 90% in March from the previous month to hit their lowest level since the Covid-19 pandemic as banks cut imports after record-high prices hit demand, a government official and two bank dealers told Reuters.
Lower imports by India, the world’s second biggest consumer of the precious metal, could limit a rally in global prices that hit a record high earlier this month on expectations that the Federal Reserve will cut interest rates this year.
The drop in imports could also help India narrow its trade deficit and support the rupee. India’s gold imports are likely to fall to 10 to 11 metric tons in March from 110 metric tons in February, said a government official, who declined to be named as he was not authorised to talk to the media.
Gold imports in March 2024 are expected to be the lowest since the Covid pandemic, when air traffic restrictions limited imports and lockdowns led to the closure of jewellery shops.
“A negligible quantity of gold is being cleared from customs this month after paying duty. There has been a sharp drop in gold imports compared to last month,” the government official said. Two Mumbai-based bullion dealers from two leading gold-importing banks said they imported very little gold in March due to weak demand.
