The world’s second-biggest consumer of gold, India, ramped up imports of the metal by 471% from a year earlier to a record 160 tons in March, Reuters reported, citing a government source.
According to the source, the country purchased a record 321 tons of gold in the first quarter, up from 124 tons a year ago. In value terms, imports surged to $8.4 billion from $1.23 billion, the source said.
Analysts predict that higher imports by one of the world’s top bullion consumers could support benchmark gold prices, which have corrected nearly 17% from an all-time high of $2,072 in August 2020.
Imports grew after a reduction in taxes, and the correction in prices from record highs drew retail buyers and jewelers alike. In February, India slashed import duties on gold to 10.75% from 12.5% to boost retail demand and curtail smuggling.
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Jewelers started building inventories after seeing robust retail demand, said an unnamed Mumbai-based bullion dealer with a gold importing bank. “Throughout the month, gold was trading at a premium because of jewelry demand,” he was quoted by the agency as saying, adding that, in April, imports could fall below 100 tons, as jewelers were raising concerns that the government could impose a lockdown to stop the rise in Covid-19 infections.
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