Mumbai: India imported a mere 50 kg of gold valued at US$ 2.84 million during the month of April 2020 as against the 110.18 tonnes valued at US$ 3.97 billion in the same month a year ago, as the countrywide lockdown and the ban on air travel brought trade in the yellow metal as well as in gold jewellery to a near standstill, according to figures reported in the media.
Citing a government source, news agency Reuters said that this was the lowest level that imports of the precious metal have recorded in nearly three decades.
The drastic drop in imports in April comes soon after the World Gold Council (WGC) released its Gold Demand Trends for Q1 2020 stating that India’s gold demand fell 36% to 101 tonnes in volume terms and 20% in value terms to Rs 37,580 crore, even as the price of the yellow metal soared to record levels during the three month period.
Gold jewellery demand was hit even more badly, declining by 41% to 73.9 tonnes in volume terms and by 27% to Rs 27,230 crore in value terms during the quarter.
The Q1 figures were a result of a “combination of factors such as high and volatile prices (and) economic uncertainties” with the severe logistical freeze following lockdown impacting demand only towards the end of the quarter.
In April, as imports froze, industry sales plummeted with hardly any significant business being transacted on Akshaya Tritiya, seen as the second most important gold buying occasion in India.
Gold prices have continued to be high in early May, and though they fell below the US$ 1,700 per ounce levels on May 1, the prices have remained over US$ 1,695 over the last few days.
As an initial response to the lifting of lockdown restriction in parts of Italy and the US, as well as in many parts of India, prices dipped marginally. But due to continued sparring between US and China over the origins of the coronavirus, which also revived fears of a renewed trade war, the dip in prices did not sustain.
Analysts point out that while global gold prices had risen 18% last year, they have already registered a 12% rise in the first four months of the current year.