India gold premiums surge on anticipated festive season demand

 

NEW DELHI (Scrap Monster): The gold premiums in India have more than doubled during current week in anticipation of towering festive season demand.

The fall in gold prices over last week has incited fresh buying interest among customers. The yellow metal prices had fallen nearly $27 per Oz during past week. In addition, the late pick-up in monsoon across the country is also expected to lift the rural gold trade in the country.

 

The country is about to celebrate the ‘Ganesha’ festival-a major festive occasion, particularly in Western India. The gold sales are expected to grind higher as gold buying during festive season is considered auspicious in the country. Furthermore, gold demand is expected to reach peak in October during Diwali.

 

According to Prithviraj Kothari, Vice President, Indian Bullion and Jewellers Association (IBJA), the gold imports by the country are likely to swell during September primarily on account of increased festive season demand. The IBJA estimates suggest that gold imports by the country will probably double from 40 metric tons in August to 70 metric tons in Sep ‘14.

 

According to trade sources, jewellers have started stocking up on gold inventory ahead of the season. The consumer demand for gold too has seen gradual pickup during the week. As a result, gold premiums which were ruling in the range $3-$4 per Oz last week, have now shot up to $8-$11 per Oz. It must be noted that gold premiums in the country had dropped to zero during the month of July.