Indian gold jewelers stock up with eye on Akshaya Trititya festival

- ADVERTISEMENT -

BENGALURU/MUMBAI – Gold prices in India were at a premium this week as jewelers raised purchases ahead of a key festival, while higher prices kept bullion demand in check elsewhere in Asia.

In the last week of April, Indians will celebrate Akshaya Trititya festival, when buying gold is considered auspicious.

“Jewelers are anticipating good retail demand during Akshaya Trititya. They are quite active in the market this week,” said Daman Prakash Rathod, a director at MNC Bullion, a wholesaler in Chennai.

Dealers in India, the world’s second-largest gold market, were charging a premium of up to $1 an ounce this week over official domestic prices, compared to a discount of $1 last week. The domestic price includes a 10 percent import tax.

“The demand is expected to go up in rural areas due to good monsoon rains. That’s why we have seen good (gold) imports in the last three months,” said a Mumbai-based bank dealer with a private bank.

In the local market gold futures were trading around 29,257 rupees per 10 grams on Thursday, up nearly 5 percent in five weeks.

“Demand in India is definitely picking up but demand in rest of Asia is slow as prices have moved up … people are selling more than buying,” said a Singapore-based banker.

The benchmark spot gold price was at its highest level for over five months earlier this week, boosted by political tensions over North Korea and uncertainty ahead of the French presidential election.

Premiums in top consumer China came down to $3-4 an ounce over the international benchmark from $6-$7 an ounce last week.

“Physical demand in Asia has been quiet this week … There is not so much interest in the market especially with prices heading towards $1,300,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

Hong Kong premiums were quoted at around 60 to 90 cents, unchanged from last week.

Prices in Japan continued to remain at a discount of 50 cents due to limited market liquidity, a Tokyo-based trader said.