Gold prices hit record in India, imports down 79 percent

Gold prices hit a record high in futures markets in India today. This has reduced demand in the country, the second largest consumer of gold.

According to a Reuters report, the price of gold per 10 grams was 56,245 rupees or 691 dollars 45 cents in the Indian futures market on Friday. Earlier in August 2020, the price of gold was 56 thousand 191 rupees.

With this, the price of gold has increased for four consecutive weeks. Due to continued price rise, the demand for gold has naturally declined. India's gold imports fell by 79 percent in December compared to the same month last year. This is the lowest monthly import in two decades.

India is the second highest consumer of gold in the world. If the demand for the precious metal falls in India, it will also affect the profit margin in the global market. On the other hand, those concerned say that the trade deficit created in the country will decrease slightly due to the decrease in gold import in the Indian market. It will even help in controlling the value of Indian currency Rupee. In the meantime, many sellers have started selling gold stockpiles taking advantage of the price hike. That too is acting as an influence behind reducing import demand.

An anonymous government official told Reuters that India imported 95 tons of gold in December 2021. In December last year, it came down to 20 tons. In terms of value, gold imports were worth $1.18 billion in December, which was $4.73 billion in the previous year. According to the full year estimate, 1 thousand 68 tonnes of gold was exported in 2021. In 2022 it came down to 706 tons.

More than 90 percent of India's annual gold demand is met through imports. In 2021, India imported gold worth 5,580 million dollars. Imports in 2022 were worth 3,660 million dollars.