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India’s gold imports surge in November

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India’s gold imports

Along with China’s import data, India’s gold import data give you a solid direction for physical gold demand in the Asian market. Traditionally, India has been the number-one gold consumer. Recently, it was overtaken by China. It still accounts for ~25% of the total demand. This makes it quite important to track India’s gold imports.

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Tracking gold imports

The value data for gold imports are reported by the Reserve Bank of India (or RBI) every month. It shows India’s physical gold demand. India imports ~90% of the gold it consumes. It’s the major component of India’s trade deficit. India’s government imposed a 10% import duty on gold’s value. It also placed other restrictions on gold imports.

Very strong growth in November

Despite India’s challenges, the value of gold imports increased by ~603% year-over-year in November. This follows very strong imports in October when the growth was 400% year-over-year. The value of gold imports came in at $5.61 billion against $4.17 billion in October. In volume terms, imports were 145–150 tons in November.

Last year, November imports were severely impacted by import restrictions. The government imposed the restrictions to control the current account deficit (or CAD).

Strong physical buying from the world’s second-largest consumer is positive for gold prices (GLD) and gold stocks such as Goldcorp Inc. (GG), Barrick Gold Corp. (ABX), Newmont Mining Corporation (NEM), Kinross Gold Corporation (KGC), and Yamana Gold (AUY). It also affects ETFs such as the Gold Miners Index (GDX) that invest in these stocks.

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