India’s October gold imports surged 60% from a year earlier to a 31-month high as a drop in prices ahead of Deepavali, prompted jewellers to ramp up purchases, a government source said on Monday.

Higher imports by the world’s second-biggest bullion consumer could support benchmark gold prices, but may also widen India’s trade deficit and put pressure on the ailing rupee.

India imported 123 metric tons of gold in October, compared with 77 tons a year earlier, the source said, declining to be named.

The average monthly imports in October in the past decade were around 66 tons. In value terms, October imports nearly doubled to $7.23 billion from $3.7 billion a year earlier, he said.

At the start of October, local prices fell to their lowest level in 7 months, providing an opportunity for jewellers to stock up for festivals, said a Mumbai-based bullion dealer with a private bank.

Local gold futures jumped to a record high of ₹61,914 per 10 grams in November, but demand remained robust during Deepavali, said Amit Modak, CEO at jeweller PN Gadgil and Sons in Pune.

There was strong demand for coins and bars as people viewed gold as a long-term investment product, leading to increased purchases, he said.