Gold imports by India are said to have jumped ahead of festival
Gold imports by India surged in April amid falling prices and higher demand ahead of the second-biggest gold-buying day in the Hindu calendar.
Inbound shipments grew to 121 tons last month from 52.8 tons a year earlier, according to a person familiar with the data, who asked not to be identified as the information isn’t public. Shipments were higher than the 73 tons in March as well. Finance Ministry spokesman D.S. Malik wasn’t immediately available for comment.
Gold demand in India is picking after slow sales in the last couple of years as higher prices and government curbs to crack down on unaccounted wealth weighed on the sector. Consumption in the second-biggest gold buying nation may rise this quarter because of the traditional wedding season purchases, the auspicious Akshaya Tritiya festival and rising crop prices that increase the spending power of rural consumers, the World Gold Council said last week.
Hindus buy valuables including gold and silver on Akshaya Tritiya, which falls on Tuesday this year, in the belief that it will bring luck and prosperity. That faith coupled with an about 7 percent drop in prices from a more than five-year high in February is underpinning demand.
“Because prices have come down, it has helped everybody,” said Chirag Sheth, an analyst at Metals Focus Ltd. “There was a certain amount of pent demand which was also there in the market.”
To entice consumers, jewelers in India are lining up discounts for Akshaya Tritiya. Retailers such as Malabar Gold & Diamonds are offering as much as 50 percent off on jewelry-making charges, while Tata Group’s Titan Co. is giving a discount of up to 25 percent. The charges vary from store to store and city to city, and can contribute as much as 10 percent to the total cost of an ornament. Others are giving freebies such as Kerala-based Kalyan Jewellers, which said it is giving away gold coins for free to some customers.
“There are reports of robust pre-Akshaya Tritiya sales in the markets,” Ahammed MP, chairman of Malabar Gold & Diamonds, said in a statement. “A higher sales volume is expected as compared with last year and in percentage terms, we can expect sales growth of around 15-20 percent.”
People profiting from the equity market will also turn toward gold to diversify their portfolio, boosting demand for the precious metal, according to digital gold platform Augmont, which is offering buyers opting for home delivery of their gold purchases an equal amount of silver free during the festival. The benchmark index has gained about 6 percent so far this year.
(By Shruti Srivastava and Swansy Afonso)