Gold premiums jump as festivals near

MUMBAI Thu Jul 25, 2013 4:11pm IST

Gold biscuits are seen in this picture illustration taken inside a jewellery showroom in Mumbai June 4, 2013. REUTERS/Danish Siddiqui/Files

Gold biscuits are seen in this picture illustration taken inside a jewellery showroom in Mumbai June 4, 2013.

Credit: Reuters/Danish Siddiqui/Files

Related Topics

MUMBAI (Reuters) - Gold premiums in India, the world's biggest buyer of the metal, jumped on Thursday due to short supplies even as traders, looking to stock up for festivals, waited for prices to fall further from their highest level in more than a month.

Premiums rose four fold to $20 an ounce on London prices on Thursday after the Reserve Bank of India tightened gold imports, making them dependent on export volumes with an eye to reducing a record current account deficit.

"Premiums have shot up as there is no gold supply, even after paying $20 premium, it is difficult to get gold," said Bachhraj Bamalwa, a director at the All India Gems and Jewellery Trade Federation, adding "banks are not committing anything for supply of gold for next week."

Premiums would shoot up to $30-40 an ounce in August, if the same import policy continues, said Mayank Khemka, managing director with Khemka Group, a wholesaler in New Delhi.

The festival season starts in mid-August and will peak with Dhanteras in November. The wedding season also starts around that period.

"Current policy is very detrimental and domestic jewellers won't get any supplies," causing premiums to shoot up, said Khemka.

On the Multi Commodity Exchange, gold prices eased from their highest level in more than a month.

At 4.09 p.m., the most-active gold for August delivery on the Multi Commodity Exchange (MCX) was 0.53 percent lower at 27,105 rupees per 10 grams, easing from the previous day's high of 27,716 rupees, a level last seen on June 20.

Silver for September was 1.42 percent lower at 40,760 rupees per kg.

(Reporting by Siddesh Mayenkar; Editing by Jijo Jacob)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage