Gold imports by India, the world’s biggest consumer, may soar this quarter as a plunge in prices spurs demand for jewelry, coins and bars during the country’s biggest bullion festival, a jewelers’ group said.
Inbound shipments may jump 47% to 225 metric tons in the three months through June from 153 tons a year earlier, said Haresh Soni, chairman of the All India Gems & Jewellery Trade Federation. Sales during Akshaya Tritiya, the auspicious gold- buying festival today, are estimated to be 20% more than a year earlier, he said.
Shoppers crowded jewelry stores and bank outlets across India to buy ornaments and coins, potentially helping gold extend a rally from a two-year low even as holdings in exchange-traded funds backed by the precious metal tumble. Bullion plummeted 14% in two sessions through April 15 in the worst slide since 1983, boosting demand from India to China and Australia and causing a shortage of supplies.
“Gold is God’s currency for people so the faith is much more,” Prithviraj Kothari, managing director of Riddisiddhi Bullions Ltd., and a former president of the Bombay Bullion Association, said by phone from Mumbai. “People buy gold on Akshaya Tritiya as the belief is that anything bought on the day will only multiply.”
Akshaya Tritiya is considered by the country’s more than 900 million Hindus as the traditional day to buy precious metals. Bullion is bought during festivals and marriages as part of the bridal trousseau or gifted in the form of jewelry by relatives. Gold sales may jump 50% to 30 tons during this year’s festival, Kothari said.
“We are on a holiday but since this is the most auspicious day of the year we came to buy gold,” Narendra Holkar, a 50- year-old businessman from Bangalore, said while scanning a set of intricately designed jewelry at a shop in Mumbai’s Zaveri Bazaar. Holkar plans to buy a necklace and pendant for his 19-year-old daughter.
Bullion entered a bear market in London in April as investors sold the metal in favor of riskier assets on speculation that the global economy was recovering. The precious metal is off to its worst start to the year since 1982, losing 15%.