The SPDR Gold Trust ETF (NYSE:GLD) has had a rough past few weeks, but India’s massive jewelry market is doing its part to put a floor under gold prices.
Gold imports to India jumped 342% in April compared to the year-ago period, as jewelers restocked their stores ahead of a busy wedding season that’s just getting started.
High demand for gold jewelry in the world’s second largest nation is anticipated to last at least until mid-June. Bloomberg has some details on the massive push:
Shipments rose to 98.3 metric tons last month from 22.2 tons a year earlier, according to a person familiar with provisional data from the finance ministry, who asked not to be identified as the data aren’t public. Imports were affected a year earlier because of a strike by jewelers to protest an excise tax on jewelry made and sold locally. Finance Ministry spokesman D. S. Malik declined to comment on the data.
India’s appetite for gold is legendary, but the country’s economy came to a near standstill last year when the government implemented unprecedented cash controls to try and curb black market spending. Demand has since recovered, as has the Indian stock market, which recently hit yearly highs.
That’s good news for gold (and gold ETF) investors, although some analysts believe the yellow metal will suffer another major plunge before things turn back around for the next major leg up.
The SPDR Gold Trust ETF (NYSE:GLD) was trading at $115.99 per share on Wednesday afternoon, down $0.06 (-0.05%). Year-to-date, GLD has gained 5.82%, versus a 7.24% rise in the benchmark S&P 500 index during the same period.