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India stops importing gold

Apr 03 2009 21:27

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Mumbai - India, long famed as the world's largest gold buyer, has stopped importing the precious metal as people sell their scrap jewellery and coins to exploit high world bullion prices, dealers said on Friday.

Dealers said there were no gold imports in February or March.

Even in January - the middle of the gift-giving wedding season - India imported just 1.8m tonnes, down nearly 90% from a level of 14 tonnes a year earlier, industry data showed.

"There were no imports in February and March," Suresh Hundia, president of the Bombay Bullion Association told AFP on Friday.

Experts say this is the first time in more than a decade that India has not imported gold.

Jewellers have reported all kinds of people - from lower class, middle class to even the wealthy - selling gold bangles and necklaces to exploit a differential in the world spot price and the Indian price, which is higher.

Globally, flows of gold scrap are believed to have sharply exceeded the amount of newly mined gold, analysts say.

However, India could soon be importing gold again if world prices fall further, said Hundia, noting the differential between the domestic and world price had narrowed sharply.

Hong Kong gold prices closed lower at $908.00 an ounce on Friday, down from the previous day's close of $922.00, on speculation that the global financial crisis could be nearing an end.

Prices of gold have risen on the back of the slowdown as investors have sought the precious metal as a safe haven amid market volatility.

- Sapa-AFP

 
 
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