Gold imports by India, last year’s biggest buyer, slid to as low as 170 tons in the third quarter from 205 tons a year earlier, according to Bachhraj Bamalwa, chairman of the All India Gems & Jewellery Trade Federation. Local prices fell 5.7 percent since setting a record Sept. 13. Gold’s drop this month may spur more physical demand in Asia, Standard Bank said in an Oct. 24 report. Indian consumers usually boost purchases before the wedding season and religious festivals later this year.
Central banks have been expanding bullion reserves to diversify from currencies. Nations may add almost 500 tons this year, the London-based World Gold Council said in August. Brazil raised its gold reserves last month for the first time since December 2008 and countries from South Korea to Russia increased holdings this year, International Monetary Fund data show.
In other commodities, 15 of 30 traders and analysts surveyed expect copper to gain next week and 10 were bearish. The metal for delivery in three months, the London Metal Exchange’s benchmark contract, climbed 3.5 percent to $7,866.75 a ton this year.
Fourteen of 20 people surveyed said raw sugar will rise next week and three expected a decline. The commodity slid 15 percent to 19.72 cents a pound since the start of January on the ICE Futures U.S. exchange in New York.
Fifteen of 28 people surveyed anticipate higher corn prices next week and five were bearish, while 17 of 29 said soybeans will climb and five predicted a drop. Corn rose 16 percent to $7.53 a bushel in Chicago trading this year as soybeans rallied 30 percent to $15.6625 a bushel. Both crops reached all-time highs since August as the worst U.S. drought in a half century damaged crops.
The GSCI gauge of raw materials erased this year’s gain three days ago after entering a bull market in the third quarter. The last annual decline was in 2008 and the index made annual advances in 11 of the past 13 years.
The commodity supercycle has further to go because of increasing demand from China and emerging markets, Chris Watling, chief executive officer of Longview Economics Ltd., and Dambisa Moyo, a former Goldman Sachs Group Inc. economist, said at a conference in London on Oct. 24.
“The inflation story in commodities is warranted,” said Colin O’Shea, the head of commodities at Hermes Investment Management Ltd. in London, which manages about $2.3 billion of raw-material assets. “Inflation could really happen, and happen in a big way over the course of the next few years. Historically, the primary reason for investing in commodities is diversification.”