Posted on March 2, 2015 byunder
Gold premiums in top consumer India could jump to as much as USD 5 an ounce over world prices next week, from being almost at par, after Finance Minister Arun Jaitley surprised jewellers by maintaining import duty at a record level in Saturday’s budget. The wedding season that extends to May typically raises gold demand, but many had delayed purchases expecting a cut in the 10 percent tax.
Buying had been muted in the past few weeks in the otherwise buzzing jewellery centres, Zaveri Baazar in Mumbai and Karol Bagh in New Delhi. “Gold prices were declining on expectations of a duty cut but now prices would rise and premiums would shoot to USD 3 to USD 4 an ounce,” said Rahul Gupta, director at P.P. Jewellers in New Delhi.
Keyur Shah, head of precious metals at retailer Muthoot Pappachan, reckons jewellers and manufacturers will replenish their inventory from Monday, boosting premiums to USD 5 an ounce. “Inventories with jewellers and manufacturers are low as everyone was waiting for the duty cut to place fresh orders,” Shah said. “Next week we would see big purchases from them.” Jaitley instead proposed introducing gold deposit accounts to make use of the more than 20,000 tonnes held in households and temples in the country, and launched a state gold bond to temper imports.
Courtesy : Moneycontrol