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Stock Advisory in Indore, After rising 71% in Dec, five reasons why gold imports will halve in Jan
After rising by a staggering 71% in Dec 2017, the decline in imports this month has its roots in both tradition and economics
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After a sharp rise in gold imports in December, inward shipments of the precious metal are expected to halve in January. According to data from the ministry of commerce released on Monday (yesterday), gold imports in December 2017 were up 71 percent to $3.39 billion. In tonnage terms, this is 81 tonnes from 30 tonnes in December 2016.
However, a source tracking imports say, “In January, the import figure is expected to fall sharply and may halve from December.” Based on his analysis and talks with market players, there could be five reasons why January imports could be lower.
1. The first half of January (ahead of 14 January or Makar Sankranti) is considered as inauspicious for gold buying, hence the demand has been low.
2. Gold price is also on the rise and Indian demand, according to the source, has been price sensitive. During the past one-month international gold prices have risen 6.5 percent and the metal is quoting at $1,337 an ounce. In Mumbai, the price is up 5.4 percent and at its highest since September 2017, at Rs 30,095 per 10 grams.
3. The price rise that began mid-December prompted the market to curb imports in order to rein in further price increases and to ensure a favorable revision in tariff value in January.
The government announces the revision in the tariff value for calculating gold import duty every fortnight. This benchmark was hiked in January due to the higher price in the second half of December.
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