'Gold imports likely to have risen in Oct-Dec quarter'
Gold imports is likely to have increased in the October-December quarter and the uptrend is likely to continue in the coming months as well, Kotak Mahindra Bank said in a research note.
New Delhi: Gold imports is likely to have increased in the October-December quarter and the uptrend is likely to continue in the coming months as well, Kotak Mahindra Bank said in a research note.
Gold imports is likely to have risen in the third quarter of the current financial year (October-December) as gold prices are witnessing a slowdown globally, and demand might have increased owing to the Diwali period and marriage season, it said.
With falling gold prices globally and a steady USD/INR, the Rupee prices of gold have now dipped to below Rs 31,000 per 10 gm.
"This is expected to be a good price point for demand to kick higher," Kotak Mahindra Bank chief economist Indranil Pan said in a research note, adding that "this is likely to be reflected in data for 3Q of FY13 that includes the Diwali period and marriage season."
Going forward, gold imports could continue to be high as real returns from domestic deposits remain low, Pan said.
Meanwhile, concerned over rising gold import and widening current account deficit (CAD), Finance Minister P Chidambaram on Wednesday said government is considering steps to make import of the precious metal more expensive.
"Demand for gold must be moderated... We may be left with no choice but to make it a little more expensive to import gold. The matter is under government consideration," he said.
The CAD, which represents the difference between exports and imports after considering cash remittances and payment, has widened to USD 38.7 billion or 4.6 percent of the GDP during the first half of the current fiscal.
This was mainly contributed by gold imports which amounted to USD 20.25 billion. During 2011-12, gold imports stood at USD 56.2 billion.
According to the report, CAD to print 4.3 percent of GDP in FY13 (previous estimate 4.2 percent), while, BoP deficit to be restricted to USD 5.6 billion, taking into account the stable risk conditions globally.
"Risk however emanates from global risks of a US fiscal cliff and uncertainties regarding the European sovereign debt crisis leading to lower capital flows to India and domestic uncertainties--both political and economic (Union Budget 2013-14)," the report added.