India, the world’s biggest bullion consumer, has imported 664.29 tons of gold worth over $25.74 billion during April- December period of the current fiscal.
India has exported 38.11 tons of gold during the first nine month of the current fiscal, worth $1.55 billion.
British banking firm HSBC expects an improving Indian economy could improve gold’s fundamental picture and help prices find a bottom.
Last week, India’s trade deficit hit a 17-month low as a result of weaker oil prices. Looking ahead, economists at the international bank say they expect to see a current account surplus sometime this year.
“While the Indian government did not announce a relaxation to the tariff on gold imports in the Union Budget on 28 February, a current account surplus would be viewed favourably for the bullion market and local merchants as it raises expectations that the RBI may eventually ease the tariffs,”analysts at HSBC added.
If the INR stabilizes, and given low international gold prices, HSBC expects bullion imports may remain strong in the coming months. Should this dovetail with continued import demand from China, the market could be on a firmer fundamental footing and gold prices may begin to bottom out.
Zhejiang Yaang Pipe Industry Co., Limited (www.yaang.com)