Premiums on gold in India nearly halved in the latest week as higher supplies and low domestic demand in a seasonally slack period weighed, while appetite for the precious metal in rest of Asia picked up slightly as prices dipped below $1,300 an ounce.
Premiums in India, the world’s second-biggest gold buyer, fell on Friday to $5-$6 an ounce on London prices, against $10 quoted last week, traders said. Premiums struck a record $160 an ounce in December last year.
“There’s carry forward stock from June, and because of low demand, supply is available,” said Bachhraj Bamalwa, director at the All India Gems and Jewellery Trade Federation.
Demand is generally low during the monsoon period. Festivals will re-start in September and continue till November.
India is estimated to have imported 100 tonnes of gold in June, about twice the normal average after private agencies were allowed to import the metal. Imports may be about 40-50 tonnes in July and August, Bamalwa said.