Gold sales collapse in India
Jewellers in India say gold demand has dropped 30% to 40%.
A trade association told the Times of India that consumers are not buying gold for a variety of reasons: rumours that the price is headed lower, a business recession and import restrictions.
Shoppers in India, still the world's biggest bullion consumer, appear to be sitting on their hands after the government announced last week that banks will now be required to set aside 20% of all imported gold for export purposes.
The government has been been fighting Indian's yen for gold, which widens India's trade deficit.
Fatehchand Ranka, president of the Pune Saraf Association, told TOI that sales of the yellow metal had plunged during the past couple of months due to instability in the market and rumours that gold prices may dip to Rs 20,000 per 10 g. "People are waiting for the prices to come down. Though this is the lean season for gold sales, the demand has been unusually low – around 30-40% lower than in the same period last year. Also, most businesses are in recession, due to which the sales have been lower than usual," he said.