MUMBAI (Scrap Monster): The physical gold premiums in India have plunged to fresh lows primarily on the back of renewed supply following the Reserve Bank of India’s (RBI) recent relaxation of gold import norm. The RBI had allowed star and premier export houses to trade-in the yellow metal. According to market players, the premiums which quoted at $15 to $18 per Oz more than halved during the week to under $10 per Oz.
According to Bachhraj Bamalwa, Director, All India Gems and Jewellery Trade Federation (GJF), the availability of gold has increased further to RBI’s policy action. Currently, there is no shortage of gold in the market. He further stated that the retail demand for gold too has dried up as the wedding season is about to come to an end in the country. Poor monsoon is feared to slacken the rural gold demand in the country, he added.
The trade federation also noted that gold customers in the country are seen to have deferred their gold purchases on the hopes of duty cut during Budget, which may result in further fall in domestic gold prices. Bachhraj Bamalwa stated that the trade body expects reduction of gold import duty by at least 4% to be announced by the country’s Finance Ministry.
The gold imports by the country had plunged to 35 tonnes in May this year, falling by almost 50% when compared with May 2013 imports. The imports of gold have gained momentum in June and are expected to touch normal levels during the month.