November 28, 2013 / 10:48 AM / 6 years ago

Gold edges lower, premiums still up

Farmer Bachiben Kolipatle, 63, selects gold earrings inside a jewellery shop at Vadnagar village in Gujarat September 3, 2013. REUTERS/Amit Dave/Files

MUMBAI (Reuters) - Indian gold futures edged lower on Thursday due to profit-taking, though a firm overseas market kept the downside limited, with limited supplies to meet the peak wedding season demand resulting in higher premiums.

The actively traded gold for December delivery on the Multi Commodity Exchange (MCX) was 0.18 percent lower at 29,940 rupees per 10 grams at 3.34 am.

Silver for December delivery on the MCX was 0.22 percent lower at 44,084 rupees per kg.

In the physical market, traders quoted a premium of $130 an ounce on London prices due to tight supplies.

“Demand has picked up a little bit, supplies are tight so premiums have jumped,” said Bachhraj Bamalwa, director at the All India Gems and Jewellery Trade Federation.

To ease its trade deficit, India has made it more expensive to bring in gold, the biggest non-essential import item, by setting the import duty at a record high 10 percent.

It has also tied the quantity of imports to exports, making it necessary for importing agencies to fulfil export orders before sending any bullion for local consumption.

The World Gold Council (WGC) cut its forecast for Indian gold demand earlier this month, predicting that the country could also lose its place as the world’s biggest consumer of bullion to China.

Reporting by Siddesh Mayenkar; Editing by Anupama Dwivedi

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