Tuesday, February 23, 2016

India's February gold imports seen at lowest since 2013

India's overseas gold purchases are likely to hit a more than two-year low in February, as rising prices and hopes for a cut in import taxes keep buyers away, industry sources said.

While lower purchases by the world's second-biggest consumer could dent the current rally in global bullion prices, it would mean relief for the government which has been struggling to curb gold imports that cost the country $36 billion in 2015.

India's imports of the metal are expected to drop to 25 tonnes in February, according to a median of estimates from five industry participants, including bank dealers and traders.

That would be about 67 percent below month-ago levels and the lowest since September 2013, when arrivals were hit by a government mandate to export a fifth of all gold imports.

"Banks and trading agencies have scaled down imports. They are being forced to offer heavy discounts (to global prices) to clear inventory," said Bachhraj Bamalwa, director at All India Gems and Jewellery Trade Federation, pointing to weak demand.

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