Gold imports fall on higher prices

India's gold imports plunged for the second straight month from a year earlier after a rally to a 27-year high curbed jewellery demand in the world's biggest consumer of bullion during the traditional peak consumption season.

Purchases in November fell to 12 tonnes from 59 tonnes a year earlier, according to the Bombay Bullion Association, which represents 230 trading companies.

Imports slumped to 14 tonnes in October from 68 tonnes a year earlier. The data is preliminary and will be finalised by the year-end.

The October-December period is usually the busiest season in India for jewellery sales, spurred by the wedding season and Diwali, the Festival of Light. Gold, set for its seventh annual gain this year, approached the $850 an ounce peak last month, prompting consumers to defer purchases.

"This is a price sensitive market and people are willing to wait for prices to dip before they make purchases," said Si Kannan, analyst at Kotak Commodity Services in Mumbai. "Also a surge in scrap sales dented demand."

The South Asian nation may buy between 800 tonnes and 900 tonnes of gold this year, less than the 1,000 tonnes estimated by the World Gold Council, Ajay Mitra, head of the producer-funded group in India, said in October.

"The past two months have been disastrous for jewellers," Suresh Hundia, president of the bullion association, said. Jewellery demand may revive if prices fall to around $773 an ounce, he said.

Gold for immediate delivery traded at $799.50 an ounce at 1:25 pm on Friday. The metal has almost tripled since the end of 2000, when it fetched $272.25 an ounce.