NEW DELHI: With gold prices on the rise, import of gold into India is falling. The country imported just 10 tonnes of gold in February as against 59 tonnes a year ago.
With international silver prices above those for local scrap, Indian trading firms were also exporting silver for the first time, dealers said.
Analysts expected even more weaker demand in March.. International spot gold prices fell just below $1,000 an ounce on Tuesday, near a record peak over $1,030 hit the previous day and having risen more than 20 percent this year.
India, the world's largest gold consumer, annually imports about 700 to 800 tonnes. Local gold prices were at about 13,500 rupees ($332.3) per 10 grams, which traders said was slightly above international prices.
Meanwhile, silver exports are likely to rise because 400 tonnes of unsold silver ordered by Indian firms and lying with banks for the past five to six months due to low prices for local silver scrap were likely to be re exported.
Silver scrap was pouring into the big cities from small towns and rural hinterlands for sale given attractive prices. Scrap silver utensils are being refined and being exported after converting them into bars.
In the last two months about two tonnes of silver is being exported on a daily basis in the past one or two months.
Local silver prices are currently about 24,000 to 25,000 rupees per kg. Many rural households prefer to invest their savings in silver as it is more affordable than gold.
India's total annual silver consumption is about 3,000 tonnes, of which jewellery accounts for about 20 to 30 percent. The rest is consumed by the industry.