Gold Imports Plunge by 71% to Lowest in 20 Months as Demand Wanes Amid Rising Prices

Image Source : FREEPIK Gold imports plunge by 71% to lowest in 20 months as demand wanes amid rising prices

On the Multi Commodity Exchange (MCX), gold futures began trading at Rs. 56156.00 per 10 grams, showing a slight decrease of 0.10%. On the other hand, silver futures opened at Rs. 65607.00 per kilogram, with a slight decrease of 0.22%.

As of 3:24 pm GMT, spot silver experienced an increase of 0.08% and was trading at $21.76 per ounce. Platinum reached a price of $927.50. On the other hand, Palladium was trading at $1,507.19.

According to a report by JM Financial Research, there has been a 71% decrease in gold imports, with the lowest level recorded at USD 697mn in the past 20 months. This decline occurred without any intervention from the government to limit gold imports. The rise in gold prices by 4.5% in January may have contributed to the reduced demand for gold.

An ICICIdirect report suggests that due to the anticipation of an increase in interest rates and a strong dollar, gold is expected to be traded with a negative bias. The breach of the key 20 day EMA support and the lower band of the upward sloping trend channel suggests that the trend is weak. As long as prices remain below 56,500, they are predicted to decrease towards 55,700-55,600. Meanwhile, MCX silver has hit the key support and 38.2% Fibonacci retracement level of the bull rally at 64,780. For prices to decline further towards 64,200, they have to move below 64,780. The report also notes that the 50 day EMA at 66,900 would serve as a critical resistance for the price on the upside.

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