With international gold price falling to the lowest since late May, gold price in India was on Friday quoted in discount of $5-$10 per ounce from the premium seen in the past few days.
After demonitisation, around $1 billion worth gold was imported in just one week on high demand, and the flow of import continued. However, jewellers were not seeing demand and several traders have stopped giving import orders.
In Mumbai, LBMA-certified imported gold was selling at $5 an ounce discount, while gold refined by Indian companies not having LBMA certification was selling at $10 discount.
Sudheesh Nambiath, lead analyst–GFMS Thomson Reuters, said, “Market price started quoting at a discount as demand has disappeared.” Import orders were getting cancelled since Thursday following scrutiny and notices by the income tax department. Raids and surveys further continued on smaller jewellers in Delhi and other areas. As a result, gold demand fell suddenly. The cash crunch has made people postpone jewellery buying and even for marriages, said a jeweller.
Standard gold price in Mumbai on Friday fell 1.5% to close at Rs 29,160 a 10 g and silver fell 2.19% to close at Rs 41,765 a kilo. Both precious metals were trading at four-and-half-month lows.
In the international market, gold price hit its lowest since late May as the dollar surged to a near 14-year peak on expectations for a US rate hike next month and higher fiscal spending from US President-elect Donald Trump.
