The gold premiums in Mumbai climbed higher during the week.
The premiums jumped from $4 to $6 during the previous week to $5-$8 per ounce over London spot prices. Meantime, the gold imports by the country have dropped in anticipation of further clarification by the government on removal of 80:20 gold import norm.
According to sources, the gold imports are set to drop sharply during the month of December this year. The country had imported nearly 110 tonnes of gold during November 14. The monthly imports are likely to reduce to almost one-third during this month. The gold shipped into the country during initial ten days of the month totaled approximately 10 tonnes. Further fall in gold imports may force the government to lower gold import duty structure in the upcoming financial budget, sources added.
Currently, there seems to be less clarity on abolition of 80:20 gold import rule. Moreover, the peak demand witnessed during wedding season has subsided. Both these factors have resulted in sharp drop in gold import demand.
However, jewelers indicate that large stockpiles of gold are still left with warehouses, as importers stocked up on rumors that RBI was planning to tighten gold import norms. The stock would be sufficient to meet the demand for December. According to them, gold sales for the entire year 2014 are likely to end higher by at least 5% in comparison with the previous year.
Elsewhere, spot premiums at Chinese Shanghai Gold Exchange remained steady at $2 per ounce over spot prices on 1 kilogram bars. The premiums in Hong Kong and Singapore remained lower at $1.10 per ounce and $1.20 per ounce respectively. Meanwhile, the gold premiums in Dubai edged higher to $1 during the week.