London — Imports of gold bars into India totaled 60.7 mt in January, down 55% month on month to the lowest level since October, Indian customs data showed Wednesday.
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The Indian gold market, the world's largest after China, has struggled with high international prices as gold continues to outperform in 2016 on safe haven demand amid market uncertainty.
The discount paid for physical gold in India to the international price has extended to record levels in recent weeks, heard at $35-$40/oz countrywide Wednesday, as local investors continue to be deterred by steep prices.
Gold has gained more than 15% this year, trading Wednesday close to its one-year high of $1,250/oz.
In rupee terms, gold has been trading at 2 1/2-year highs, clearly affecting local demand. Customs data showed imports of gold dore -- gold ore used in refining -- totaled 37.6 mt in January, a 14.1% increase from December. Refiners in a special economic zone in northern India have special provision from the government to operate with only an 8% duty, compared with 10% for gold bar importers.
Many in the market are looking to the government for support and are pinning hopes on a duty cut in the 2016-2017 national budget due Monday.
The London Bullion Market Association Gold Price settled at $1,250.75/oz Wednesday afternoon, up $29.45/oz from Tuesday's close.