Gold bullion is displayed at Hatton Garden Metals precious metal dealers in London Image Credit: Reuters

India’s gold imports tumbled by half in January as record domestic prices and a slowdown in economic growth curbed demand in the world’s second-biggest buyer.

Imports fell to 21.7 tonnes last month from 45.9 tonnes a year earlier, according to a person familiar with the data, who asked not to be identified as the information isn’t public. Finance Ministry spokesman Rajesh Malhotra wasn’t immediately available for comment. The drop in January comes after the World Gold Council said full-year purchases slumped 14 per cent in 2019.

India’s lacklustre gold demand is set to last through the first half as prices remain elevated and investors look to different asset classes, according to the council. At the same time, the country’s economy is on track to grow at the slowest pace in a decade. Purchases may pick up after June if growth accelerates and households adjust to higher prices, WGC’s managing director for India P.R. Somasundaram said last week.

“Demand is very bad, pathetic right now,” Avinash Gupta, partner at Hyderabad-based Mamraj Mussadilal Jewellers and a member of the All India Gem & Jewellery Domestic Council, said by phone. “We are still looking at lower numbers for imports and demand for at least the next couple of months. Unless, and until, the economy improves and the consumption improves, I don’t see jewellery sales going up.”

Jewellery demand may pick up around Akshaya Tritiya, which falls in April and is the second-most auspicious day to buy gold in the Hindu calendar, according to Gupta. The WGC forecasts demand at 700 tonnes to 800 tonnes in 2020 after shrinking to 690 tonnes last year.