Gold sales drop 10% on weak market sentiment

Gold sales have dipped 10% in the past one month, hit by muted market sentiment and a slowdown in rural demand. Premiums on the yellow metal too have disappeared in the Mumbai market and it is available at a discount of $10 per ounce in the grey market, said people familiar with the trade.

Bullion traders in Mumbai’s Zaveri Bazar said that the lull in demand will also affect imports in June. While gold imports grew 10.47% to $2.42 billion in May on falling prices and easing of restrictions by RBI, it was $2.19 billion in May, 2014. In April this year, imports grew 78.3% to $3.13 billion. “In June, imports may be around 35-40 tonnes,” said Mukesh Kothari, director, Riddisiddhi Bullions.

In rural India, gold is considered an important asset class,” said a bullion trader. Rural India accounts for 60% of the total gold consumption which stood around 811 tonnes last year.

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Posted in: Indian Market Tips