Festival demand soars, India gold premiums go through the roof

The import curbs and slowdown in recycled gold sales have resulted in demand outpacing supplies by clear margin.

According to traders, there has been a notable reduction in the sale of old gold recently. The supply of recycled gold declined sharply to nearly 10 tonnes during the second quarter of the current fiscal year.The gold import restrictions by the government and the country’s Central bank has created acute shortage of gold in market. The strong festive demand has pushed the premiums to higher levels. In fact, the premiums have almost doubled to $50 per troy ounce during the past two weeks.

The demand is expected to remain robust until Nov 3- the main festival of Diwali. The retail jewellers are buoyant. According to traders, ‘demand is strong, but there is no gold’. They do not rule out the premiums scaling higher from current levels during the next week.

Read More: www.resourceinvestor.com/2013/10/10/festival-demand-soars-india-gold-premiums-go-throu