India’s gold imports plunged 86% year-on-year in June due to record high prices, international air travel being banned and many jewellery shops remaining shut amid a nationwide lockdown to curb the spread of COVID-19, a government source said.

The world’s second-biggest consumer of the precious metal imported about 11 tonnes of gold in June, a steep fall from the 77.7 tonnes a year ago, the source, who asked to remain anonymous, said.

In value terms, June imports dropped to $608.8 million from $2.7 billion a year ago, he added. Gold imports in the quarter ended June plunged 96% from a year earlier, to 13 tonnes, the official said, after shipments virtually ground to a halt in April and May.

Chennai, Delhi and Mumbai generate significant demand but in all three cities, COVID-19 cases have been rising and thus preventing potential customers to shop, said Surendra Mehta, secretary at the India Bullion and Jewellers Association.

Retail demand muted

Jewellers are not making purchases from banks as retail demand is subdued, said a bullion division head of a Mumbai-based private bank.

“For the next two-three months, demand would remain weak as buyers are waiting for a correction,” he said. Gold imports could fall below 15 tonnes in July, down from last year’s 39.7 tonnes, said another dealer.