Demand sees gold trade at premium in India

Dealers were charging premium of up to $3 an ounce — the first time since early September

Gold is trading at a premium in India for the first time in more than two months on robust demand following a busy festival week, while a dip in global prices last week helped bullion’s appeal in some Asian hubs.

Dealers in India, the world’s second biggest gold consumer after China, were charging a premium — the first time since early September — of up to $3 (Dh11.02) an ounce over official domestic prices last week.

Last week they were offering a discount of $3. The domestic price includes a 10 per cent import tax.

“After poor sales during Dusherra, jewellers were expecting weak demand even during Diwali, but surprisingly, demand was better than expected,” a Mumbai-based dealer with a private bullion importing bank said on Friday.

Indians celebrated Dhanteras and Diwali last week, when buying gold is considered auspicious. Dusherra was on October 19.

“Jewellery demand improved in last few days due to a correction in prices,” Mangesh Devi, a jeweller in the western state of Maharashtra, said.