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    India gold dealers charge premiums as imports, smuggling stall

    Synopsis

    India's gold imports dived 86% year-on-year in June because of record high prices and as international air travel was banned in response to the COVID-19 pandemic.

    gold-barमहाराष्ट्र टाइम्स.कॉम
    Local gold futures rose to a record 49,348 rupees per 10 grams earlier this week.
    MUMBAI/BENGALURU: Physical gold sold at a premium in India this week for the first time this year, driven by plunging imports and a near halt in smuggling that offset the impact of high unemployment and a rise in domestic prices across Asia that could deter buyers.

    India's gold imports dived 86% year-on-year in June because of record high prices and as international air travel was banned in response to the COVID-19 pandemic.

    "Demand is very weak, but dealers are still charging a premium due to lower imports and as smuggling has nearly stopped," said Harshad Ajmera, a gold wholesaler in Kolkata.

    In thin trade, dealers charged premiums of up to $3 an ounce over official domestic prices, up from last week's $22 discount. The domestic price includes a 12.5% import tax and 3% sales tax.

    Local gold futures rose to a record 49,348 rupees per 10 grams earlier this week.
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    In top consumer China, dealers described trade as weak and quiet as they sold at hefty discounts of about $20-$25 versus global benchmark spot prices.

    "The unemployment rate has been rising. Don't think people will have the sentiment to buy more jewellery. Besides, the stock market has been hot in China recently, sucking more money away from gold to stocks," Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS, said.

    Global spot prices breached the $1,800 an ounce threshold this week.

    Activity was muted in Hong Kong too, with gold sold at $0.50 an ounce discount to a $0.50 premium.

    Singapore, however, continued to buck the trend, with premiums of $1.50 per ounce charged against $0.80-$1.50 last week as interest held, especially from the investment side.

    "The belief that the price of gold would soon go beyond the 2011 highs is gaining supporters rapidly," said Vincent Tie, sales manager at Silver Bullion.

    In Japan, gold was sold between level with the benchmark to a $0.50 an ounce premium.




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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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