India gold demand to improve during April festive season

 

NEW DELHI (Scrap Monster): The physical gold demand in India is likely to stay muted until the commencement of festive season late April. The festival buying is likely to peak during Akshaya Tritiya which falls on April 21st this year. The physical gold buying in India which started the year on a subdued note has continued to remain weak so far this year.

 

The gold imports by the country remained low during the month of February this year, in anticipation of an import duty cut announcement during the budget. The extremely low gold inventory levels have propelled gold imports during this month. According to industry sources, gold imports during the initial ten days of March have already crossed 25 mt. It must be noted that the gold imports by the country during the entire month of February this year had amounted to just under 35 mt.

 

Meanwhile, gold premiums have started falling in March this year. The discounts seen at the beginning of the year have now moved into marginal premiums. Industry sources indicate that gold premiums in the country have dropped from $2.25 per Oz to $1.25 per Oz during end of the previous week.

 

Imports of gold by agencies have picked up in the country during the past few days. However, gold sales continue to remain weak, despite low gold prices. Moreover, gold smuggling still continues to remain rampant in the country. Official data released by the Customs Department indicate that number of seizures of smuggled gold has increased to 3,412 during the initial ten months of the current fiscal, significantly higher when compared with the total seizures of 2,450 during the entire previous fiscal year.

 

Meantime, RBI data indicates that the country’s gold reserves remained static at $19.83 billion during the week ended March 13th. The gold reserves had plunged by $346.2 million during the week before that.