Mumbai: Most gold traders in India, the world’s biggest buyer of the metal, struggled to get supplies despite paying high premiums in the middle of the wedding season.
India has imposed supply restrictions on gold, the biggest non-essential import item, by linking domestic consumption to exports to curb a record trade deficit. The Central government has also hiked the import duty to a record 10 per cent.
“Supply won’t be smooth until the 80/20 rule is in force. Demand is slow despite the wedding season,” said Bachhraj Bamalwa, director with the All India Gems and Jewellery Trade Federation.
The wedding season is underway in India, and will continue till January. Gold is often gifted by the parents to the bride as an endowment.
Premiums jumped to $120 an ounce on London prices as against $80 quoted last week, he said.
“People made wedding purchases in advance in April and May, and others are refraining from making new purchases as they don’t know the future course of action from the government,” said Bamalwa.
Due to government restrictions, China this year is set to usurp India as the world’s biggest gold consumer by a convincing margin as strict import rules introduced by New Delhi bite, forecasts from the World Gold Council showed.
The industry body cut its outlook for Indian demand in 2013 to around 900 tonnes from the 1,000 tonnes predicted previously, while keeping its forecast for China unchanged at 1,000 tonnes.
At 10.40 am, the actively traded gold for December delivery on the Multi Commodity Exchange (MCX) was 0.29 percent lower at Rs 30,245 per 10 grams while silver was 1.04 percent lower at Rs 46,253 per kg.
