India's gold import dips by 47% to 402 tonnes in 2008

MUMBAI: Gold imports in India for 2008 dipped by almost 47 per cent to 402 tonnes, a top economist said.

"High prices have been the culprit this year as gold imports in India for 2008 dipped by almost 47 per cent to 402 tonnes. The December 2008 gold imports stood at only 3 tonnes versus the 16 tonnes in December 2007," National Commodities Exchange of India's (NCDEX) Economist, Manasee S Gokhale, said in a report here.

The economic turmoil has also hit the demand for luxury goods and hence the demand for jewellery has fallen considerably.

Buying remained dull and prices remained high on global cues, Gokhale said.

Although the gold market fundamentals look excellent, investors have been struggling for survival and in this attempt have sold even their gold and silver positions. As a result, gold prices have dropped continuously till they hit the $680/troy ounce levels. As compared to equities or other commodities, the percentage fall in gold prices has been lesser, Gokhale said.

Commenting on the performance of gold price in 2009, Gokhale said that if the downward scenario continues and there is deflation, gold would do well as asset value drops because of fear and distrust in the system.

"What appeared to be excellent market conditions in 2008 have all vanished into thin air and staring us in the face is the growing uncertainty created by the financial crisis," Gokhale said.