Indian Gold Import Data Disappoints – Commerzbank

Indian gold import data is much lower than expected, according to the Bombay Bullion Association, says Commerzbank, and this could have implications for physical prices. Commerzbank notes that the association says India imported “only” 125 tons of gold in the fourth quarter of 2011, with buyers hampered by a combination of high prices and high domestic interest rates. Comparatively, the bank says, the World Gold Council was still anticipating in its November data that India would import 281 tons. “The gold price thus lacked an important crutch in the fourth quarter, as a result of which there was even an 8.4% year-on-year drop in Indian gold imports in 2011 as a whole to around 878 tons. This also put paid to expectations that India might for the very first time import more than 1,000 tons of gold within one year,” the bank says. The situation is unlikely to change this quarter, Bombay Bullion Association says. The high prices and high interest rates limits liquidity, and the association forecasts that imports in the first quarter of 2012 could be halved year-on-year. India had imported 286 tons of gold in the first quarter of 2011. “Thus for the time being the gold price will not find any support from this side,” Commerzbank says. The bank adds although the Istanbul Gold Exchange notes Turkey’s imports 80 tons of gold in 2011 were nearly twice as much as in 2010 “this can hardly compensate for the disappointing data from India.”