India’s Gold Imports Set to Plunge in December After Record High in November

India’s gold imports are expected to decline sharply in December following record purchases in November, as the absence of major festivals and rising prices prompt buyers to delay purchases, trade and government officials reported.

November witnessed a surge in imports, which more than doubled from the previous month, reaching a record $14.8 billion. This spike widened India’s trade deficit to an unprecedented level and pushed the rupee to a historic low. However, December is likely to see a 50% drop, with imports estimated at around $5 billion, according to industry sources.

Prithviraj Kothari, president of the India Bullion and Jewellers Association (IBJA), noted that November’s demand was driven by both investment and jewellery needs. “But now, things are cooling off, and imports are slowing down,” Kothari said.

The sharp rise in November imports was partially triggered by a price correction that prompted buyers to act. Local gold prices fell to ₹73,300 ($863) per 10 grams in mid-November, down from the October record of ₹79,775, making it attractive for buyers. However, prices rebounded in December, discouraging further purchases, according to a Mumbai-based bullion dealer.

Dealers also reported fewer gold consignments arriving for clearance this month compared to November. Weak demand has led to Indian dealers offering discounts of up to $8 per ounce over official domestic prices, which include 6% import duty and 3% sales levies. In contrast, last month, dealers charged premiums of up to $16 per ounce.

Robust investment demand in November stemmed from gold’s stronger returns compared to the stock market. India’s NSE Nifty 50 index dropped 11% from its record high in late September, falling to 23,263.15 points in November.

Festive season purchases also contributed to November’s record imports. Jewellers sought to replenish stocks following strong demand during festivals like Dussehra and Diwali, said Amit Modak, CEO of PN Gadgil & Sons.

With December lacking similar festive demand and higher prices discouraging buying, gold imports are set to decline significantly, which could help narrow India’s trade deficit and offer support to the struggling rupee.