India's Q2 '14 gold imports to stay in line with Q1, forecasts GJF

NEW DELHI (Scrap Monster): The trade data released recently had showed that gold imports by India surged 65% year-on-year to $3.12 billion in June ’14, lifting the trade deficit to 11-month high. However, gold imports during April-June ’14 quarter dropped significantly by 62% over the year. Haresh Soni, Chairman, All India Gem & Jewellery Trade Federation (GJF) forecasts that gold import figures are likely to cool off further in Q2, primarily since the government has decided to keep the gold import duty unchanged.

According to GJF, the gold imports by the country spiked up in June ’14 in the wake of India International Jewellery Show (IIJS). The trend is unlikely to continue in July ’14 and also in the forthcoming quarter. The gold imports during Q2 this year may well be in line with those of Q1, Soni added.

Had the government lowered the gold import duty from 10% to 2%, the imports would have swelled in July ’14. However, despite immense pressure from the country’s gold industry, the Finance Ministry had decided to keep the high gold import duty unchanged. This should keep the gold imports under check during this month. The subdued demand from domestic jewellers and shift in assets to surging stock markets is likely to result in lesser gold imports by the country during Q2 this fiscal.

Meanwhile, India’s Finance Minister reiterated that his government will continue with the measures taken by the previous government to curb gold imports into the country. A review of these measures is likely only when the Current Account Deficit (CAD) figures reach desired levels, he added.