Loading prices...

Register/Sign in
ScrapMonster
Sell Your Junk CarGet an instant quote for your car on ScrapMonster.com
Gold October 31, 2014 08:00:48 AM

Physical gold premiums in India show no signs of decline

Paul Ploumis
ScrapMonster Author
The unwinding festive season demand is most unlikely to affect the physical gold premiums in the country

Physical gold premiums in India show no signs of decline

MUMBAI (Scrap Monster): The unwinding festive season demand is most unlikely to affect the physical gold premiums in the country. The anticipated rise in gold demand on account of arrival of marriage season may keep the premiums at reasonably higher levels.

According to market participants, the gold premiums which dropped this week to $15-$18 per Oz from $22-$25 during the festive season is most likely to prevail. Any sizeable drop in premiums is expected only towards fag end of the wedding season, which normally extends towards end-December. Also, with gold prices dropping further, wedding season demand is expected to remain robust. However, the staggered buying pattern may keep the premiums at current levels in the immediate near term.

Although official figures are yet to be released, sources indicate that the country witnessed 20% jump in gold purchases during festive season this year. The gold imports during September had almost doubled from the month before. As per sources, sudden surge in gold imports may force the government to enact tighter gold import norms, which may send premiums to higher levels. However, such action by the government is expected to be announced only during the next budget. Hence policy actions are less likely to have short term impact on country’s gold premiums, sources added.

Meanwhile, gold premium in Chinese Shanghai has been stagnant at $2 per Oz over London prices. The premiums have maintained these levels even as gold prices declined from $1300 per Oz to sub $1200 per Oz levels. The stagnant Shanghai Gold Exchange premium is a clear indication for muted response from Chinese customers to cheap gold prices.

Elsewhere in the world, premiums in Hong Kong dropped marginally to $1.20 per Oz during the week. Meanwhile, higher production costs have kept the Dubai gold premiums unchanged at $1 per Oz over LME prices.

×

Quick Search

Advanced Search