As from November, the retail demand has seen a huge fall, the December gold imports may go below 50 tonnes. The high-value currency notes will cease to be legal on November 8th, declared by the government, this has happened after that.
World’s second largest consumer of gold is India and the already low international gold prices further can impact. Due to this, the country’s trade deficit will come down.
Because the wedding season was right ahead, around 100 tonnes will be the gold imports in November, as per the industry sources. In November, with unaccounted old notes, people had bought gold to clear their money. But on the amount of money that can be withdrawn, the government has put strict restrictions. But now only on proving the wedding is genuine, for weddings a withdrawal of Rs. 250,000 rupees is allowed.
On the gold import, there was also a fear that government will impose restrictions or in the month of November, totally stop it so the banks and jewellers have imported more.
But from the third week of November, the demand fell down due to a shortfall of cash in hand. The importers will cut their imports or postpone.
As per industry sources, in November, The gold imported is lying unsold to a large extent. Up to more than 50% of the annual sale for jewellery, the wedding season makes but the retail consumers are exchanging old gold jewellery for new as the lack of cash is cutting down the sales. Till the cash supply is normalised, the demand is anticipated to be lower for next few months.
Source : importexportmarketing.in