Gold Became Costlier

Gold became costlier by Rs 3164, yet imports doubled in 9 months

In the last 9 months (April-December, 2021), gold has become costlier by Rs 3000 per 10 grams, yet its sales are jumping instead of decreasing. The country’s gold imports more than doubled in the first nine months (April-December, 2021) of the current fiscal to cross $38 billion. In April-December, 2020, gold imports stood at $ 16.78 billion.

According to IBJA, on April 1, 2021, the average price of 24-carat 10 grams of gold in bullion markets was Rs 44919 and on December 31, 2021, it became costlier by Rs 3164 per 10 grams to Rs 48083. It has closed at Rs 48135 on Friday 14 January 2022.

This information has been received from the data of the Ministry of Commerce. Higher demand has led to an increase in gold imports. The import of gold affects the current account deficit (CAD). According to the data, gold imports increased to $4.8 billion in December 2021 from $4.5 billion in the same period a year ago.

Trade deficit also increased to $ 142.44 billion

The increase in gold imports in the first nine months of the financial year also widened the trade deficit to $142.44 billion, from $61.38 billion in the same period of the previous fiscal. Similarly, silver imports rose to $2 billion in the first nine months of the financial year from $762 million in the same period of the previous fiscal. India is the second largest consumer of gold in the world after China. Gold is mainly imported to meet the demand of the jewelery industry.

Gems and jewelery exports grew by 71 per cent to $29 million in the first nine months of the current fiscal. According to Reserve Bank of India data, the country’s current account deficit stood at $9.6 billion or 1.3 per cent of gross domestic product (GDP) in the September quarter.

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