MUMBAI: Global economic meltdown continues to hurt India’s gold imports. Imports of the yellow metal to India—the largest consumer and importer of gold in the world—are all set plunge to the levels in 2009. In 2008, India’s gold imports had fallen by 45 per cent to touch 450 tons. On Friday, Commerzbank International said that India’s gold imports will fall below 380 tonnes if the current economic situation continues. Do you want to trade in gold and other global commodities? "Given the condition of the Indian economy and plunging gold imports so far this year, I see overall imports below 380 tonnes for 2009," Vishal Patel, sales trader, India and Middle East, Commerzbank International, one of the top sellers of gold to India, told Reuters. Analysts like Patel and the Bombay Bullion Association (BBA) said that for the first time in this decade, gold imports to India are going to take a big hit. Gold imports are heading towards zero levels in March for the second month in a row, BBA president Suresh Hundia had told Commodity Online early this week. Gold imports to the country had plunged to zero levels, as no bank and trading houses imported any gold during the month of February. “March is going to follow February in gold imports. There will be hardly any gold import this month because of the slump in bullion market thanks to high prices of the yellow metal,” Hundia said. He said gold prices ruling at a high of over Rs 15,000 per 10 gram level is the main deterrent for plunging sales that has resulted in zero gold import to India. “Gold import during March is going to be almost zero due to absence of any demand because of high prices. If there is reduction in price, we may witness some imports,” Hundia said. In February, there was no gold import at all, while it stood at 21 tonnes in March 2008 and at 23 tonnes in February last year. Hundia said, unless gold prices come down to Rs 13,500 per 10 grams level, there will be no demand to support import. Gold prices on Tuesday declined by Rs 50 to Rs 15,200 per 10 gram level in the spot markets from its previous day's close. “If the prices continues to remain at such high levels, even the coming festive season will not be able to boost demand for the precious metal,” Hundia added. Experts feel, the better performance of equity markets, which has gained 7.19 per cent or about 600 points during the last three trading sessions, might pull down prices. Gold price is likely to remain at high level for 4-5 months before coming to Rs 13,500 per 10 grams level, Bonanza Commodity Brokers' Assistant Vice-President (Commodity Research), Tarun Satsangi said. Gold is no longer glittering in India, the biggest global market for the consumption and imports of the yellow metal. Buying of gold jewellery has fallen sharply in January and February leading to a slump in the yellow metal’s imports. According to the Bombay Bullion Association figures, there was more than 90% plunge in gold imports in January and nil imports in February. In the last eight years from 2000, gold imports to India every year have been between 400-800 tons. But trade bodies have warned that gold imports this year could collapse to 100 tons, if the current trend continues. “It will not be a surprise if gold imports fall to an all-time low of 100 tons or below in 2009,” said bullion analyst Ashish Roy. High prices, global economic meltdown and financial crunch among investors and bullion dealers led to low demand for gold in India, where yellow metal is considered the best safe haven investment and people buy gold for weddings and other ceremonies. According to Hundia, gold sales and demand are plunging to negligible levels because of high prices. “Gold and jewellery sector is reeling under a crisis because of high prices and retrenchments across sectors,” he said. Gold prices which in December was from Rs 13,505 for10 grams moved to an all-time high of Rs 16,000 per ten grams last week. Analysts and India trade bodies have predicted that gold prices could zoom to Rs 17,000 per ten grams by April this year. They also say that if this lowest level of gold intake continues in India, 2009 will be the worst year in this decade as far as gold imports are concerned. But despite the gloom in gold imports and sales in India, bullion traders hope that the gold market might pick up in April-May season. The World Gold Council has predicted there will be a modest gain in gold purchases in India during the summer wedding season and the Hindu religious festival of Akshaya Tritiya. “There will be a modest growth of 10-15 per cent in the Indian domestic jewellery business,” said K Shivram, Vice-President, World Gold Council.

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