India Gold Premiums Dipped As Soaring Prices Dent Demand

SEATTLE (Scrap Monster): The premiums on gold in India over the official domestic prices dipped sharply during the week, as retail gold demand continued to reel under pressure, on account of more destructive second wave of the Covid-19 pandemic. The rising gold prices too hit the demand.

The premiums this week were down to $2 per ounce over official domestic gold prices in the country. The premiums have halved when compared with the $4 per ounce during the prior week. The jewellers in the country have been reducing fresh purchases of gold, due to falling retail demand. As per dealer forecasts, the retail demand for gold in the country is likely to fall further in the coming months.

According to Hareesh V, Research Head Commodities at Geojit Financial Services, signs of economic recovery in major economies around the world are likely to restrict major gains in gold. The gold prices may rise to touch levels of $1,820 per ounce, if it manages to stay above $1,765 per ounce. However, a fall below $1,720 per ounce will confirm an immediate reversal of uptrend, he added.

Meantime, many analysts continue to remain positive on gold in the long-term. The rising inflation and lower interest rates could lend support to gold prices at lower levels, they noted.

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