Demand for physical gold was lacklustre in top consumers India this week, but the advent of peak wedding season is expected to usher in renewed interest for bullion in coming weeks.
India is the second-biggest consumer of the yellow metal in the world after China.
“The wedding season has started. In the next few weeks, there are many wedding dates, which will boost demand,” said Kumar Jain, a Mumbai-based jeweller.
Dealers in India were charging a premium of up to $3 an ounce this week over official domestic prices, unchanged from last week. The domestic price includes a 10 percent import tax.
“Gold imports by (jewellery) export houses have fallen sharply in the last few weeks. That’s why the market is in premium, despite moderate demand,” said a dealer with a private bank in Mumbai.
In October, India tightened gold import norms for jewellery exporters by restricting them from importing the yellow metal only for export purposes and not for selling in the domestic market.
“The wholesalers need to buy... to produce jewellery, especially with some spillover demand coming from the Diwali and Dhanterras festivals, while the high net worth individuals... buy to diversify their portfolio and they have the money.”
—Reuters
