Gold imports into India have surged in the last six months thanks to festivals, economic recovery and concerns over a new tax regime and the push for the cashless society in India.
Imports totalled 521 tonnes in the first half of this year, compared to just 510 tonnes in all of 2016.
Should buying levels continue then India could end 2017 having imported over 900 tonnes, a level not seen since 2012.
These figures are impressive given where the country’s gold demand was at the end of the 2016. The low figure of just 510 tonnes imported in the entire year was mainly thanks to a range of political and economic issues which had a more negative role than anyone foresaw.
Many of those issues are now resolved, but some had lingering effects. Some good, some bad. So it is with tentative celebration that we look at this boost in gold demand from the world’s second-largest lover of gold and ask how the country has begun to favour gold once again and if it will continue at pace.
2016: A tough year for gold buyers
Last year physical gold demand – for gold coins, gold bars and jewelery – in India hit a seven year low not because of a loss in interest in the precious metal but thanks to a range of political and economic factors.
The biggest of these events was of course the sudden announcement by the government to immediately remove all Rs500 and Rs1,000 notes by 30 December. A total of Rs15.44 trillion ($220 billion) – or 86% of the currency in circulation – was abandoned almost overnight.
