 "Gold premium rises on festive demand")
Demand for gold has seen an improvement, of late, thanks to the festive season. As a result, imports and premiums for physical delivery of the yellow metal are showing an upward trend. Premiums are charged for meeting delivery demand, as supplies get scarce. The premium, which stood at $5 per ounce a few weeks ago, has gone up to $20 on Saturday in Mumbai's Zaveri Bazaar.
However, with rising premiums, demand for imports is also on the rise. The gold import estimated for September was about 60 tonnes, while for October it could be anything between 70 and 80 tonnes, as rising premium has made import more attractive. Even star trading houses have also increased imports ahead of festivals. In the next few months, average gold import is estimated at 70 tonnes.
"Dussehra is a good indicator for festival gold demand. This time, we have seen 15-18 per cent rise in demand compared to the last year," said Rajiv Popley, director, Popley Group. The group has operations in India and Dubai. He said this time demand is mostly from actual users and end-consumers, which a good sign.
However, gold and silver prices continue to fall in the international and domestic markets. On Saturday, gold closed at Rs 26,850 per 10g in Mumbai, while international gold was quoted at $1,190 per ounce. Silver was quoted at $16.8 per ounce in the international market, while in India it closed at Rs 39,250 per kg on Saturday, the lowest since November 5, 2010. Gold prices corrected after US announced good job data on Friday and WTI crude oil price fell below $90.
On 19 December last year, gold closed at $1,188 and the Friday's level was the lowest since then. Technically, since $1,180 level was not broken, traders say now price for the yellow metal can go up to $1,240 per ounce in the international market.
However, with rising premiums, demand for imports is also on the rise. The gold import estimated for September was about 60 tonnes, while for October it could be anything between 70 and 80 tonnes, as rising premium has made import more attractive. Even star trading houses have also increased imports ahead of festivals. In the next few months, average gold import is estimated at 70 tonnes.
"Dussehra is a good indicator for festival gold demand. This time, we have seen 15-18 per cent rise in demand compared to the last year," said Rajiv Popley, director, Popley Group. The group has operations in India and Dubai. He said this time demand is mostly from actual users and end-consumers, which a good sign.
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Traditionally, Indians buy gold between Dussehra and Diwali for investment and marriage. The marriage season begins 11 days after Diwali.
However, gold and silver prices continue to fall in the international and domestic markets. On Saturday, gold closed at Rs 26,850 per 10g in Mumbai, while international gold was quoted at $1,190 per ounce. Silver was quoted at $16.8 per ounce in the international market, while in India it closed at Rs 39,250 per kg on Saturday, the lowest since November 5, 2010. Gold prices corrected after US announced good job data on Friday and WTI crude oil price fell below $90.
On 19 December last year, gold closed at $1,188 and the Friday's level was the lowest since then. Technically, since $1,180 level was not broken, traders say now price for the yellow metal can go up to $1,240 per ounce in the international market.