Gold premiums at two-month high on import duty talk
MUMBAI (Reuters) - Premiums on gold shipments to India jumped to their highest level in two months on Tuesday as traders rushed in to place orders for the metal ahead of an expected rise in import duty, even as gold refiners overses hurried to keep pace.
India, the world's biggest buyer of the metal, could likely hike import duty on the yellow metal from the current 4 percent, as part of measures to contain a record current account deficit. The RBI also recommended limits on value and volumes of gold imports.
"Our physical desk has already noted significant interest from Indian clients looking for gold, which could push up imports until the tax in announced," Nick Trevethan, senior commodity strategist at Australia and New Zealand Bank, said in a note.
Most of metal is supplied by Scotia Bank, Standard Bank, UBS Switzerland to Indian buyers, while MMTC (MMTC.NS), State Trading Corp, Axis Bank, HDFC Bank, Kotak Mahindra Bank and Indian Overseas Bank, among others are the major gold importers.
Traders said gold shipped to India is attracting premiums of $2-$3 an ounce on London prices, a level last seen in mid-November, while premiums stood at $1-$1.20 an ounce in Singapore. Gold traded at $1,650.38 an ounce on Tuesday.
Gold on the Multi Commodity Exchange traded at 30,916 rupees per 10 grams, up 0.18 percent.
"Nothing is available readily...it is taking 4-5 days to about a week to get the material and even refineries have just started," said a dealer with a private bank that imports bullion in Mumbai. Gold refiners are usually shut in the last few weeks of December for year-end closing and maintenance works.
Traders estimate about 40-50 tonnes might have been imported into the country since January.
"In the last 2-3 days, there was a maddening rush (to buy gold)," said a dealer with a foreign bank, which supplies bullion to Indian customers.
India imported a record 967 tonnes of the yellow metal in 2011, but shipments fell 35 percent to 518 tonnes in the first nine months to September. (Reporting by Siddesh Mayenkar; Editing by Sunil Nair)
- Tweet this
- Share this
- Digg this
- São Paulo running out of water as rain-making Amazon vanishes
- Maker of U.S. highway guardrails stops shipments over safety concerns
- Woman isolated in NJ under Ebola rules tests negative
- Iran hangs woman convicted of killing alleged rapist
- Reuters Poll - India's growth pace to pick up as reforms draw investment
Finance Minister Arun Jaitley favours a cut in interest rates to trigger demand in the construction sector, a newspaper report said on Saturday, but the Reserve Bank of India (RBI) has signalled it will not ease policy until it is confident of lower inflation. Full Article
Euro zone risks "relapse into recession" without structural reforms - Draghi. Full Article
Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw” Full Article