India's gold imports surge on pent-up jeweller demand and as retail consumers ramp up purchases for weddings. Samantha Vadas reports.
A gold rush in India. Jewellers across the country seeing a massive surge in people wanting to spend big on the country's favourite precious metal, despite New Delhi's recent shock cash crunch. Imports surged 82 percent in February, compared to the same time last year. That translates to 50 tonnes of gold. Reuters Euan Rocha explains what's leading the turnaround. "Big factors in the Indian market without a doubt is wedding season. Indian weddings result in a lot of gold consumption in India, nearly half of Indian gold consumption in terms of jewellery demand is driven by weddings and given India is right now in the heart of wedding season, that's resulting in a huge spurt in the demand as well," he says. The gold spike comes as India feels some relief from last year's massive currency crackdown, which saw 500- and 1000-rupee notes scrapped across the country, scrapping almost 90 percent of the cash in circulation practically overnight. "So gold prices globally are currently trading at around a three and a half month high this is despite a decline in Chinese imports in the early months of this year and despite a decline in gold coin sales from the US mint. So having India which is one of the largest consumers and importers of gold in the world pulling in and importing a lot of gold holds really well gold prices moving forward through the rest of the year," Rocha says. Though all that glitters is not gold, analysts say imports in March could fall, with rising prices potentially driving buyers away.