Friday, 5th August 2005 (3071 views)

The Indian gold trade is suffering as a result of the torrential monsoon rains that have lashed western parts of the country recently.

Thousands have died due to the floods and many more have had their homes destroyed or been left stranded.

In Mumbai alone nearly 1,000 have been reported dead this week as streets turned to rivers across India's financial capital.

Pawan Chokshi, a leading trader from Ahmedabad, told Reuters: "People have suffered huge losses because of floods. Gold will be the least important thing on their mind."

The states of Maharashtra and Gujarat, which were most affected by the recent floods, are central to India's gold trade. Overall the country imports more bullion than any other worldwide.

In Mumbai gold imports are down to 100 kg from an average of 1,000 kg. While imports at the port of Ahmedabad have also fallen from 1,200 kg to 200 kg.

Following the decline in imports, traders are now worried that escalating gold prices worldwide will stall demand for the metal in India.

 

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