India's gold imports tank

Gold demand in India usually picks up in the run-up to the domestic festival and wedding season next month but after an exceptional August, the country's September imports fell by more than half.

Bloomberg reports overseas purchases fell to 67 tonnes in September, down 52% from the month before according to finance ministry officials. Imports were valued $1.9 billion compared to bullion imports of $4.95 billion or 140 tonnes in August.

July imports were also higher than last month at 89 tonnes, but a recovery in the price following a plunge to near five-year lows during the summer has kept bargain hunters at bay.

Gold is India's biggest import item after crude oil. Import tax of 10% and various other duties and regulations instituted over the last couple of years have not dampened demand for gold inside the country – mainly for the jewellery industry – which is the world's number one importer ahead of China.

In an attempt to put the estimated 20,000 tonnes of gold households and Hindu temples are hoarding to more productive use and alleviate pressure on its current account, the Indian cabinet last week approved two new gold monetization schemes.

On Friday, gold bulls were off to the races, spurred by a turnaround in sentiment towards broader commodity markets. In heavy volumes in afternoon dealings on the Comex market in New York, gold futures with December delivery dates traded up as much as $15 or 1.3% at $1,159.30, the highest since August 21. Gold is  up more than 6% from lows struck on August 5 of $1,085 per ounce.