Mumbai: Gold nipped into positive territory, reversing early losses as physical buyers stepped in for bargains ahead of forthcoming festivals and investors jumped in for gold bars, pushing premiums to their highest levels in over a year.
At 01:39 pm, the most-active gold contract for October delivery on the Multi Commodity Exchange (MCX) was 0.08% higher Rs 26,207 per 10 grams, reversing from an early low of Rs 25,907.
Prices for benchmark gold futures are down about 10% from their peak of Rs 28,774 in early September.
“There is good buying, and expected to continue till Diwali,” said Haresh Acharya, head of the bullion desk at Parker Bullion in Ahmedabad. Diwali, the festival of lights, falls at the end of October this year.
Demand is likely to gain pace ahead of festivals including Dhanteras, the biggest gold buying festival in the country. Demand for weddings should also pick up as this is also a busy marriage season.
Premiums for gold bars rose to their highest level in more than a year to top $2 an ounce.
“There is a sudden demand in the market as prices have fallen,” said a dealer at a state-run bullion importing bank in Mumbai.
There has been difficulty in getting gold supplies from abroad for import since Monday due to a jump in orders across Asia, a state-run bank dealer said.
A dealer with a gold supplier in Mumbai said there is a lag of one week in delivery to jewellers, longer than the normal period of three days.
“Gold premiums are quite high, we have stopped taking indents (orders) for next week’s shipment,” said the dealer who is with a foreign bank in Mumbai that supplies gold to local jewellers.
Premiums in Hong Kong and Singapore for gold bars also jumped to their highest level since February.