Gold imports may dip by 90 pc in Jan

MUMBAI: A sharp fall in demand may hit the country's gold imports, bringing it down to between 1,200 kgs-1,800 kgs in January as against 18,000 kgs in the corresponding period last year, a top industry official said.

"The sharp fall in demand is expected to hit India's gold imports by 90 per cent at 1,200-1,800 kgs in January as compared to 18,000 kgs import in the same period last year," Bombay Bullion Association President Suresh Hundia told media.

India has remained the leading gold importer for several years. However, gold imports in 2008 dipped by almost 47 per cent to 402 tonnes. The economic turmoil has also hit demand for luxury goods and hence the demand for jewellery has fallen considerably.

The rise in price has increased the selling interest of many retail investors--there are no buyers in the physical market. The price of the yellow metal firmed up due to speculative investment by funds and ETFs, Hundia said, adding that rampant speculation pushed up gold prices.

Retail investors who own the metal for investment purposes are queuing up in the physical market in order to take advantage of higher prices. However, there are fewer market participants who are buying from such investors as the overall physical demand is very low, he added.

People are queuing up to sell gold at around Rs 14,000 per 10 grams in the Mumbai bullion market, bullion analyst Amit Zaveri, said.