The price of gold has swung to a premium in India, one of the countries that helps drive the most demand for the precious metal. It marks the first time in more than two months it has sold for a premium, according to a new report from Reuters featured on Mining.com.
The demand comes after pandemic restrictions in the country were slightly relaxed over the last 60 days. This has catalyzed a bump higher in retail demand, as people make purchases for weddings, the report says.
Local gold futures on Friday of last week traded at about 47,400 rupees per 10 grams of gold and dealers were charging a premium of up to $3 per ounce this week compared to last week’s discount of $12.
One dealer based in Mumbai said: “There is slight improvement in demand from jewellers as some of them think prices could rise above $1,800 and want to stock up.”
Meanwhile premiums in China – another major driver of gold demand – narrowed to between $3 and $4 per ounce versus between $3 and $6 per ounce last week. The report also notes that a growth in shipments from Switzerland in April and May was due to local prices trading at a premium, rather than an improvement in demand.
In Hong Kong, premiums were at $1 versus $0.70-$1 an ounce in the week prior. In Japan, demand was quiet, with premiums at $0.50 per ounce.
Vincent Tie, sales manager at Singapore dealer, Silver Bullion, concluded: “Investors’ demand for gold has marginally increased since May as they are back in the market buying the dip, seeing current prices as a good opportunity.”