India's Gold Premiums Surge to 2.5-Month High Amid Supply Constraints and Increased Demand from China
India gold premiums hit 2.5-month high on tight supply, China demand rises
Business Standard
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Gold premiums in India have reached their highest level in over two months, driven by tight supply and rising demand from China. Domestic prices are around ₹151,200 per 10 grams, while premiums have risen to $15 an ounce, reflecting uncertainty in import regulations and tax implications.
- 01Gold premiums in India hit $15 an ounce, the highest since February 7.
- 02Supply issues arose after Indian banks halted gold imports due to regulatory delays.
- 03Domestic gold prices are currently around ₹151,200 per 10 grams.
- 04Demand from China has increased, with premiums rising to $9-$12 an ounce.
- 05Retail demand in India may improve if prices drop below ₹150,000.
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Gold premiums in India have surged to $15 an ounce, the highest level in over two-and-a-half months, as supply tightens due to regulatory issues affecting imports. Indian banks had to suspend gold and silver imports earlier this month after the government delayed an authorization order, leading to significant amounts of bullion being stranded at customs. Although the order was eventually issued, uncertainty regarding applicable taxes has kept banks from resuming imports. Domestic gold prices are currently around ₹151,200 per 10 grams, having peaked at ₹155,065 last week. Meanwhile, demand from China has increased, with premiums rising to $9 to $12 an ounce, indicating renewed physical demand. Retail buying in India has slowed post-Akshaya Tritiya, but demand could rebound if prices fall below ₹150,000.
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The increase in gold premiums may lead to higher prices for consumers, affecting retail purchases and potentially slowing demand further if prices remain elevated.
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