India’s gold imports in May rose 677% versus a year ago to the highest level in a year amid price corrections. Higher imports could aid benchmark prices; however, the surge may increase the trade deficit in India and put additional pressure on the rupee.
In May, India imported 101 tonnes of gold; however, only 13 tonnes of gold were imported last year. The price correction came just before the wedding season and a key festival, Akshaya Tritiya, to promote retail jewellery purchases. In terms of money, May gold imports surged to $5.83 billion; last year, this number stood at $678 million.
Purchasing gold is considered auspicious during festivals like Dhanteras and weddings. Gold demand improved in the last month as it was wedding season. Also, many weddings got postponed due to the pandemic in the previous two years.
In May, the local gold futures dipped to Rs 49,572 per 10 grams, the lowest in the last three months. Gold imports in June are anticipated to drop further below 60 tonnes as the demand that surged in May has started to fluctuate because of the recent price correction.
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