India, the second-largest gold importer across the globe that had brought in the highest volume of precious yellow metal in a pandemic-battered 2020, traded in as many as 160 tons of golds in March, marking up an upsurge of a whopping 471 per cent compared to the same time a year earlier, a top Government official had said late on Thursday.
In point of fact, latest rise in imports of golds in the South-east Asia’s largest economic HubSpot, India, which had shipped in an approximated $32.2 billion worth of golds before the onset of pandemic outbreak, comes over the heels of a major policy change that involves a decline in import taxations, while a latest plunge in gold futures’ prices in global commodity markets, added to further bullish wing to a gold buying-bonanza for both retail buyers and jewellers.
India’s gold buying-spree could support benchmark gold prices
In tandem, followed by the reveal of media topline that the world’s fifth-largest economy by nominal GDP (Gross Domestic Product), India, had bought in a record 321 tons of gold in March quarter, roughly 2-1/2-folds up from a figure of 124 tons registered at the same time a year earlier, several industry analysts were quoted saying that the latest trend of a gold buying-frenzy would step up the pandemic-hurt economy’s trade deficit and add further pressure on Indian currency despite upscaled efforts from the Reserve Bank of India (India’s Central Bank) alongside a steep uptick in US Dollar reserves.
Apart from that, a growing fret among retailers that the Indian Government of PM Narendra Modi could re-impose lockdown measures in light of a recent rise in pandemic cases, which in effect could turn down April gold imports below 100 tons, spurred up retailers’ endeavour further to shelve more golds at a relatively lower price, which had moderated more than 17 per cent since an August 2020 peak of $2,072, eventually leading to a record rise in gold imports for any month in March.
Nonetheless, FX market had yet to feel the pinch of a sharp rise in gold inventories, as Indian currency edged 0.22 per cent lower to 73.38 rupees per Dollar last month.