Gold price premium in India jumped to their highest in nearly three months this week as the festive season gathers pace. In anticipation of a pick-up in demand, jewellers continued to stock up. Gold dealers charged premiums of $5 an ounce this week over official domestic prices, as compared to $1 premiums last week, Reuters reported. Gold prices in India include 12.5% import duty and and 3% GST.
Dussehra will be celebrated today while Diwali and Dhanteras in November, when buying gold is considered auspicious.
On Friday, gold futures traded on MCX settled at ₹50866 per 10 gram while silver at ₹62,425 per kg. In India, gold futures had hit a record high of ₹56,200 per 10 gram in August while silver ₹80,000 before losing momentum. In recent weeks, gold has remained in a narrow range, with support at lower levels.
Uncertainty over the US stimulus package and some recovery in dollar index weighed on gold. But uncertainty going into the November 3 US elections limited gold’s losses.
“A recovery in the US dollar and doubts over US fiscal stimulus measures before the presidential election are likely to weigh on gold prices further. However, resurging pandemic cases and unsolved US-China trade tensions may limit major selling pressure on prices,” said Hareesh V, Head of Commodity research, Geojit Financial Services.
Still, gold prices are up about 30% so far this year in Indian markets, tracking a global rally given its status as an inflation hedge amid unprecedented pandemic-driven stimulus across the world.
Investors remain focused on Washington, where lawmakers are struggling to reach an agreement over the stimulus bill before November 3, though there is optimism that a deal will come at some point this year. (With Agency Inputs)