Festive demand soars, India gold premiums go through the roof

10 Oct 2013 Last updated at 08:37:22 GMT
 
MUMBAI (Scrap Monster): Festival and marriage season demand have spiked up significantly, taking gold premiums to new heights. Indian retailers are seen willing to pay up to $50 more on a troy ounce of the precious metal. The import curbs and slowdown in recycled gold sales have resulted in demand outpacing supplies by clear margin.

According to traders, there has been a notable reduction in the sale of old gold recently. The supply of recycled gold declined sharply to nearly 10 tonnes during the second quarter of the current fiscal year.The gold import restrictions by the government and the country’s Central bank has created acute shortage of gold in market. The strong festive demand has pushed the premiums to higher levels. In fact, the premiums have almost doubled to $50 per troy ounce during the past two weeks.

The demand is expected to remain robust until Nov 3- the main festival of Diwali. The retail jewellers are buoyant. According to traders, ‘demand is strong, but there is no gold’. They do not rule out the premiums scaling higher from current levels during the next week.

Meanwhile, Indian customs authorities have started clearing consignments, which were held up due to lack of clarity on  gold import norms. This at least could bring some relief to traders.

Author: Paul Ploumis