NEW DELHI: There was a sharp cut in imports in June, signalling recent record high prices are dissuading fundamental demand even as the world's largest exchange-traded fund reports record holdings.
India's gold imports in June are likely to fall for the third straight month from a year ago, the head of Bombay Bullion Association said on Monday as prices stay firm.
"Imports might be 75 percent less than last year. It is because of the high prices," Suresh Hundia, president of the BBA told Reuters, adding the estimate was provisional and actual figures would be released in a few days.
India imported 29.9 tonnes of gold in June 2009.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust said its holdings rose to a record high at 1,316.177 tonnes as of June 24 from the previous high of 1,313.135 tonnes set on June 22.
Gold prices have reached new highs in the international market on persistent worries about the strength of the global market recovery, hitting above $1,264 an ounce in late June.
Spot gold traded above $1,256 an ounce on Monday around 0955 GMT.
The front-month gold futures on the Multi Commodity Exchange of India Ltd (MCX) struck an all-time high of 19,198 rupees ($416) per 10 grammes on June 8, marking a 32-percent annual rise.
Economic worries such as Euro zone sovereign debt woes have triggered a flurry of buying activity in the international market this month.
But in India, where gold is widely gifted in religious celebrataions and weddings as well as a key input for its large domestic and export-focused jewellery industry, price-sensitive buyers have turned away.
"The numbers are so bad, nobody wants to share it this time," he said referring to the importing banks and trading agencies which contribute data to the trade body.
Gold imports, which began the year on a strong footing, slackened from April as rising prices and volatility struck demand, data from the BBA shows.
