Gold imports continue to slide.

AHMEDABAD: Markets continue to suffer shortage of gold as imports remain a record low in the state. Almost two-year long economic slowdown has hit the bullion traders and jewelers hard as the new financial year began with imports of just 4.5 metric tonnes (MT) in April, lowest for April in the last six years.

Apart from slowdown, experts claim that restrictions on gold imports, high prices of gold, weakening Rupee and poor response to 80:20 scheme have led to the lowest imports of gold in the last five years.

According to the latest figures, only 4.57 MT of gold were imported in April 2014 compared to 27.5 MT in the same period in 2013, recording a growth of minus 83.3%. In 2013-14, only 92 MT of gold was imported in comparison to 193 MT in 2012-13, making it the lowest in the last five years, for a year.

Meanwhile, silver imports continued to grow as 66.15 MT of silver was imported in April 2014. In 2013-14, 1,425 MT of silver was imported - highest in the last five years in a year.

"Weakening of Rupee along with inconsistency in gold prices and duty has led to low imports. Also, the volatility in the international market has led to the shortfall," said Monal Thakkar, president, Amrapali Industries. "The premium for one ounce of gold (31.99 ounce = 1kg) is in the range of $100-$125 which is record high and is making gold out of reach of bullion traders," explained Thakkar.

Analysts believe that bullion traders are not stocking the inventory and buying in small quantities as the gold prices are expected to come down in the coming months. "The traders are pinning their hopes on the new government as they expect that the new government might ease out restrictions and open up gold imports," said Girish Choksi, a city-based bullion trader.

In a positive development, according to Gems and Jewellery Export Promotion Council, India exported $992.03 million worth of gold jewellery in March, up by 6.1% on the year-on-year basis. Bullion traders believe that exports may increase by 10-12% this year as many India-based jewelers have opened showrooms in Dubai and other cities.

Meanwhile, silver jewellery exports during 2013-14 increased by 58.6% to $1.46 million compared to exports in 2012-13.

Source : timesofindia.indiatimes.com