Gold jewellery Image Credit: File photo

New Delhi: Gold imports by India in July tumbled to the lowest monthly inflow in more than three years as demand paused following record high prices in the domestic market.

Overseas purchases fell 69 per cent to 20.4 tonnes in July from 65.6 tonnes a year earlier, according to a person familiar with the data, who asked not to be identified as the information isn’t public. That would be the smallest monthly quantity shipped since at least March 2016, when imports fell to 17.7 tonnes as jewellers went on a nationwide strike to protest against an excise duty on jewellery, data compiled by Bloomberg shows.

Total shipments in India, which imports almost all the metal it consumes, during January-July rose about 20 per cent from year earlier to 492.3 tonnes. Finance Ministry spokesman RC Joshi wasn’t immediately available for comment.

Gold has rallied to a six-year high in international markets as concerns over the escalating US-China trade war boosted demand for havens. That has pushed up prices to a record high in India and combined with an increase in import tax last month, arrested imports. Shipments also fell as demand entered the lean season between June and August. Gold futures in Mumbai rose as much as 2 per cent on Monday to a record of Rs36,990 ($526) per 10 grams.

“Physical gold demand in India will remain fragile due to higher prices following the global price movements and increased import duty,” Abhishek Bansal, chairman of Mumbai-based commodity trader ABans Group of Companies, said by mail. “Gold imports may also drop in the coming quarters due to weak demand and domestic scrap supply may increase to nearly 100-120 tonnes this year,” compensating for the drop in imports.

— Bloomberg