The lockdown which was announced on March 22 across the country has brought gold imports to an all-time low. This has created a dominoes effect across other allied sectors as well.
Overall, business of luxury goods has come to a standstill. According to Reuters, India’s gold imports fell 99.9 per cent year-on-year in April to their lowest in nearly three decades.
The reasons for this could range from: ban on air travel and closure of jewellery shops amid a nationwide lockdown to curb the spread of coronavirus.
The world’s second biggest consumer of the precious metal imported around 50 kilograms of gold in April, down from 110.18 tonnes a year ago.
In value terms, April imports dropped to $2.84 million from to $3.97 billion a year ago.
Imports were negligible in April due to a nationwide lockdown which has rippled through the country’s economy, shuttering many industries. Most of India’s imports are shipped by air, and with airline industry completely shut down, it has suffered.
Bloomberg quoted N Anantha Padmanaban, chairman of the All India Gem and Jewellery Domestic Council, as saying that gold imports will halve this year to about 350 tonnes.
Meanwhile, gold price in the domestic market rose for the second day in a row on Monday amid rising tensions between US and China and as lockdown restrictions were eased in large parts of India.
June gold futures prices rose 0.7 per cent to Rs 45,830 per 10 gram on the Multi Commodity Exchange (MCX), against a gain of Rs 650 per 10 gram in the previous session. July silver futures edged 0.44 per cent higher at Rs 41,780 per kg.
Gold had risen 18 per cent last year as the China-US trade dispute increased demand for the safe-haven amid interest rates cuts by the US central bank.
The US dollar moved away from an over one-month low on May 4, making gold costlier for investors holding other currencies.