An Asian country increased its gold imports in October, with quantities increasing by 60% compared to the same period in 2022, so that the country reached the highest level in the last 31 months.

Gold bars

A state in China imported 60% more gold in October than a year ago. Pixabay photo

India’s gold imports have hit record highs after falling prices ahead of major festivals prompted jewelers to increase purchases, sources told Reuters on condition of anonymity.

Higher imports from the world’s second largest consumer of bullion could support benchmark prices of the yellow metal, but could deepen India’s trade deficit and put pressure on the domestic currency.

Last month, India imported 123 metric tonnes of gold, compared to 77 tonnes in October 2022, the sources said, while the average monthly level of imports in October over the past decade was around 66 tonnes.

In terms of value, October imports nearly doubled to $7.23 billion from $3.7 billion in the same period in 2022, the sources added.

In early October, local prices fell to their lowest level in seven months, with jewelers taking the opportunity to increase stocks ahead of major festivals, a dealer in Mumbai told Reuters.

Jewelers were running low on stocks and were determined to increase them amid price cuts in early October“, he said.

In India, buying gold is auspicious

India celebrates the Hindu festival of Diwali in October and the annual Hindu festival of lights Diwali was celebrated last week, at both events the purchase of gold is considered auspicious.

Locally, gold prices hit a record high of 61,914 rupees per 10 grams in November, but demand remained robust during Diwali, says Amit Modak, head of Pune-based jeweler PN Gadgil and Sons. He explained that there is a high demand for coins and bullion, with people perceiving gold as a long-term investment.

India’s November gold imports are likely to fall to 80 tonnes, which would still be above the November 2022 level of 67 tonnes, given increased demand in the upcoming wedding season, another dealer told Reuters.

Globally, the average gold price was $1,976 an ounce in the second quarter of the year, 6% higher than in the second quarter of last year and 4% above the record set in the third quarter of 2020. Interest in Gold bullion rose last month after the Hamas attack on Israel inflamed tensions in a region crucial to world energy supplies and boosted demand for safe-haven assets. This advance took the price of gold closer to the record of $2,075 an ounce reached in 2020.