- Inbound shipments rise to 101 tons as prices at five-year low
- Peak festival, wedding seasons stoke demand for the metal
Gold imports by India, the world’s second-biggest consumer, more than doubled in November as a slump in global prices to a five-year low stoked demand amid the peak festival and wedding seasons.
Overseas purchases last month climbed to 101 metric tons from 45 tons in October, two finance ministry officials said, asking not to be identified citing government rules. Imports dropped 22 percent to 655 tons in the eight months through November from 841 tons a year earlier, they said.
Gold prices slid to a five-year low in November and are set for a third year of declines on expectations the first U.S. rate increase since 2006 will strengthen the dollar and reduce the appeal of the yellow metal. Demand usually peaks in the final quarter in India with gifting during festivals and culminates with the start of the wedding season in November.
Finance ministry spokesman D.S. Malik declined to comment on imports. The Commerce Ministry separately compiles and publishes gold data that differs from the finance ministry data.
Prices may drop below $900 an ounce in 2016 as higher U.S. interest rates and Treasury yields provide better avenues of investment, ABN Amro Bank NV said in a report on Dec. 1. Lower supply and healthy jewelry demand should support prices in 2017, it said.
Bullion for immediate delivery traded at $1,067.19 an ounce as of 6:08 p.m. in Mumbai. The metal dropped on Nov. 27 to $1,052.83, its lowest level since February 2010. Futures in Mumbai, down 6 percent this year, were trading at 25,113 rupees per 10 grams.