(MENAFN- Gulf Times) Gold imports by India, the world's biggest consumer after China, are said to have slumped in December, taking full year purchases to the lowest in seven years, according to a person familiar with provisional data from the country's finance ministry.
Overseas purchases declined 46% to 56.9 metric tonnes in December from 106 tonnes in the same month a year earlier, the person said, asking not to be identified as the data aren't public. Shipments tumbled 44% to 570.8 tonnes in 2016 from a year earlier, according to provisional ministry data compiled by Bloomberg. Finance Ministry spokesman DS Malik didn't respond to calls for comment.
Demand in India, which accounted for a quarter of global use in 2015, fell last year as buyers stayed away because of higher prices, a crackdown on undisclosed income and the government's decision to withdraw high-value bank notes. Demand will continue to be weak this year as Indians curtail purchases due to tighter cash supply, said Gnanasekar Thiagarajan, a director at Mumbai-based Commtrendz Risk Management
'The physical demand aspects will be completely bad for 2017, he said by phone. 'For the first time Indians will be trying to buy gold cashless. That's a big challenge.
Annual imports for domestic use may be in the range of 400 tonnes to 500 tonnes going forward, according to Rajesh Khosla, managing director of India's biggest bullion refiner MMTC-PAMP India Pvt. Indians buy gold during festivals and for marriages as part of the bridal trousseau or gifts. The nation imports almost all the gold it consumes and demand was 858 tonnes in 2015, World Gold Council data show.
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