New Delhi: India imported 65 to 70 tonnes of gold in September, down from about 100 tonnes in the previous month, as the sharp rise in global prices hit demand ahead of the country's festival season, a trade body chief said on Friday.
Gold's rise above $800 an ounce in September scared away buyers ahead of the peak season, which starts in September and culminates with the Hindu festival of lights, Diwali, in end-October, Suresh Hundia, president of the Bombay Bullion Association, told Reuters in an interview.
Hundia said Indian banks, which had imported gold anticipating a surge in demand, had been unable to sell about 20 tonnes of gold bought when prices were low.
"For the first time since 1998, the banks are stuck with so much gold," he added.
India imports around 700 to 800 tonnes gold annually, but demand suffered this year due to volatile international prices.
He said the local price of gold, about Rs12,700 ($271) per 10 grams on Friday, was too high to lure buyers.
"We expect the demand to revive only when local prices fall to around Rs11,800 to Rs11,900 per 10 grams."
Some dealers had cut prices in recent days but discontinued the discounts after international prices dipped, he said.
At 0450 GMT on Friday, international gold was ruling at $844 an ounce, after hovering at about $900 earlier in the week on the yellow metal's safe haven appeal amid financial volatility.
Hundia said India imported around 300 tonnes of silver in September, but the entire consignment was expected to be sold due to festival demand and moderate prices.
International silver prices were quoting at slightly more than $11 an ounce, sharply down from about $19.45 in July, due to a fall in crude prices.
India's annual silver imports are estimated at more than 3,000 tonnes.
It is traditionally considered auspicious to gift or buy silver articles, including utensils, during the Hindu festival of Dhan-teras, observed close to Diwali.