MUMBAI/SINGAPORE (Reuters) - After a sluggish start, gold purchases in India picked up momentum during the Akshaya Tritiya festival, usually one of the busiest gold buying days, industry officials said.
Indians are the world’s biggest consumers of bullion and Akshaya Tritiya celebrated on Tuesday is one of the most auspicious times to buy gold along with Diwali and Dhanteras.
Gold imports had more than doubled in March to 125 tonnes from 60 tonnes a year before as traders anticipated healthy demand.
“There was an increase in sales through the day. Sales volumes were higher as Indian prices were lower by 7 percent year on year,” said Bachhraj Bamalwa, director at the All India Gems and Jewellery Trade Federation.
In rupee terms, sales rose about 15 percent in the country, Bamalwa said, adding that the southern states experienced the biggest jump with a 25 percent gain in sales.
Premiums remained largely stable at $1.50-$2 an ounce over the global benchmark, as there was adequate supply of the metal in the market.
“Demand was subdued until afternoon because it was a hot day and a working day as well,” said Vrishank Jain, third-generation owner of jeweller Umedmal Tilokchand Zaveri.
“Demand picked up by late evening and overall sales grew by 15-20 percent on Tuesday compared to last year,” he said, adding that the big demand was for gold coins.
India’s imports could begin to drop from the next month as post-festival demand slows, Bamalwa said.
Customers were still being cautious about bullion purchases, given gold prices have fallen for two straight years to 2014 after a 12-year rally.
“I’m buying a small mangalsutra (a necklace worn by married Hindu women) because I don’t have one. I’m not making any special purchases for Akshay Tritiya,” said housewife Surekha Jain, shopping in Mumbai’s Zaveri Bazaar.
Despite the higher sales on Tuesday, Indian demand risks falling for a second straight year in 2015 as purchases in rural areas, which accounts for nearly 60 percent of the country’s total demand, have been hurt by unseasonable rain and lower commodity prices.
“Gold demand has improved this week after remaining weak since the start of the month. However, the rains have dented rural demand,” said Narendra Singh, who owns Kiran Jewellers in Jaipur.
Editing by Mayank Bhardwaj, Alan Raybould and Ed Davies