Gold imports surge on high demand
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India imported 286-tonnes of gold in the first quarter of 2011, according to the World Gold Council’s (WGC) report on trends in demand, released on Thursday.
The figures are 10 per cent higher compared to the 261 tonnes in the first-quarter of the last year. Last year, India’s ne
import of gold was 958 tonnes.
In the first quarter, total demand was 11 per cent higher, at 291.8 tonnes. However, the data does not take into account the second quarter’s demand for the marriage season and Akshaya Tritiya.
“Sustained momentum in the Chinese and Indian jewellery market will underpin growth in the jewellery sector through 2011. Strong demand in India during the recent Akshaya Tritiya festival and the beginning of the wedding season, alongside extensive purchasing on dips in the gold price, underlines the strength of the Indian market,” WGC said.
If the trend continues, imports could cross 1,000-tonne mark in 2011, as supply from domestic sources, mostly recycled gold, has dwindled to half and touched a low of just 10 tonnes in the first quarter from 25 tonnes in the December quarter.
The export of gold is viable when prices in India are trading at a discount to imported cost. In some cases, export of gold has been used to round trip money.
Another grey area of calculating real demand is the stock with jewellers. While there is no estimate for such stocks, Gold Field Mineral Services (GFMS) chairman, Philip Klapwijk had told Business Standard early this month that “Last year, there was a significant build up of trade inventory (gold lying unsold with jewellery shops). Therefore, the figures for demand will differ from consumption.” GFMS prepares demand trend report for the WGC.
s. While there is no estimate for such stocks, Gold Field Mineral Services (GFMS) chairman, Philip Klapwijk had told Business Standard early this month that “Last year, there was a significant build up of trade inventory (gold lying unsold with jewellery shops). Therefore, the figures for demand will differ from consumption.” GFMS prepares demand trend report for the WGC.
WGC says, “The outlook for global gold demand remains robust throughout 2011 against a background of another strong quarter, the geographic and sectoral diversity of demand and strong fundamentals.”
According to the council, prevailing global socio-economic conditions will continue to keep the demand of gold high. These include: Continued uncertainty over the US economy and dollar, ongoing European sovereign debt concerns, global inflationary pressures and continued tensions in West Asia and North Africa.
Sustained momentum in the Chinese and Indian jewellery demand will underpin growth in the jewellery sector through 2011
Net purchasing by the official sector is expected to continue in 2011 as the central bank turns to gold for diversifying reserves into an asset with no credit or counterparty risk. The central bank purchases jumped to 129 tonnes in the quarter.
During the first quarter of the year, global investment demand grew 26 per cent to 310.5 tonnes from 245.6 tonnes in the first quarter of 2010.
The demand for jewellery in the first quarter of 2011 registered a gain of seven per cent from last year’s levels of 521.3 tonnes to reach 556.9 tonnes. India and China, the two largest markets for gold jewellery, together accounted for 349.1 tonnes or 63 per cent of the total demand.
In the first quarter of 2011, gold supply declined four per cent to 872.2 tonnes, from 912.1 tonnes in the first quarter of 2010, as central banks that used to be net-sellers of gold became net buyers. The supply of recycled gold witnessed a fall, down six per cent on year earlier levels to 347.5 tonnes from 369.3 tonnes. Mine production increased 44 tonnes, a growth of seven per cent from the year-earlier levels.
Source:- business-standard.com
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