India second-quarter gold imports fall 56%

MUMBAI--India's April-June gold imports more than halved to 131 metric tons from 301 tons a year earlier, as higher prices due to a rise in import tax and a weak rupee hit overall demand, the World Gold Council said Thursday.

Prices remained near record highs despite declining global prices, as the rupee weakened against the dollar, making imports more expensive.

The government's decision to double an import tax on gold also hit sales.

General sentiment is low as gross domestic product growth will likely fall below 6% in the 2012-13 fiscal due to lower rains and a "gloomy global economic outlook," Ajay Mitra, managing director of WGC's India office, said.

"With the upcoming festival and marriage season falling in the last two quarters, we should see an upsurge in demand," he added.

The country's jewelry demand in the April-June period fell 30.5% to 124.8 tons, while investment in bars and coins plunged 51% to 56.5 tons, the WGC said in a statement.

As local prices reached record levels, there was a wave of profit-booking in gold exchange traded funds by Indian investors, it added.

Source : marketwatch.com