Gold prices in India reached to a premium for the first time in nine months on Wednesday as jewelers and dealers in the world’s No.2 consumer of the metal increased purchases ahead of major festivals. For the third day, gold prices surged today, firming up by Rs 160 to trade at two-week high of Rs 30,540 per 10 grams driven by relentless buying by jewelers at domestic spot market and firm global trends. Globally, gold rose by 0.53 per cent to USD 1,268.90 an ounce
Dealers were charging up to USD 2 an ounce over the set domestic prices. Bachhraj Bamalwa, director at the All India Gems and Jewelry Trade Federation said that the first time premiums have been seen since mid-January. Gold importers have conventionally charged premiums to lessen risks they take due to currency and price fluctuations. But Gold had been trading at a discount for most of this year due to weaker-than-usual demand and an increase in smuggling. Discounts hit a record high of $100 an ounce in July. Bachhraj Bamalwa said that in the last 10 days, demand has enhanced due to festivals. The correction in prices is aiding in attracting buyers.
Gold prices in India have declined over 8 percent since hitting a crest of 32,455 rupees ($485) per 10 grams in July, the highest level in approximately three years. Demand for gold usually gets strong in the final quarter as India gets ready for the wedding season as well as festivals such as Diwali and Dussehra, when buying Gold is considered auspicious.