Gold premiums in India touch record $100 per ounce; soars 150% over the week

MUMBAI (Scrap Monster) : The gold premiums in India shot up to 8% over and above the London prices, primarily on the back of severe shortage of supply caused by import curbs and slowdown in recycled gold trade. The premiums sky rocketed to as high as $100 more on a troy ounce of the precious metal.

There are no supplies in the domestic markets. Most of the gold imported by bullion dealers goes to the exporters, as the rules clearly states that the first preference should always go to jewellery exporters rather than domestic manufacturers.

There has been a notable reduction in the sale of old gold recently. The supply of recycled gold has declined sharply to nearly 10 tonnes during the second quarter of the current fiscal year.

The bullion dealers are reported to be quoting premiums in excess of $100 per ounce, which is almost 150% higher when compared with the $40 premiums charged during the previous week. This has essentially made gold in India dearer by additional 8% over the spot London price.

The Dhanteras and Diwali season beginning October last week may spark retail gold demand to new heights. According to traders, ‘demand is strong, but there is no gold’. The chances of gold premiums going even higher from the current levels are not ruled out.