Gold price premium in India dip ahead of Diwali1 min read . Updated: 01 Nov 2020, 12:16 PM IST
- Gold prices in India are now down about ₹6,000 from record highs hit a few months ago
- Jewellers stocked up ahead of Diwali and Dhanteras
Gold dealers in India charged premiums of $1 an ounce this week over official domestic prices, as compared to $5 premiums last week, Reuters reported. Domestic gold prices include 12.5% import duty and 3% GST. Local gold futures were trading closed the week at ₹50,700 per 10 gram in futures market on MCX.
Jewellers stocked up ahead of Diwali and Dhanteras that will be celebrated later this month. In India, gold prices had hit a high of ₹56,200 in futures market in August before losing momentum. In recent weeks, gold has remained in a narrow range.
Gold advanced on Friday as the dollar stabilized in the final days before next week’s pivotal U.S. presidential election.
On Friday, gold prices advanced as uncertainty remains high before the November 3 US vote. However, gold prices had been under pressure last month as rising coronavirus cases in Europe and US lifted the dollar’s appeal as a safe asset over bullion. In Europe, countries have begun to impose new restrictions in an effort to stem the crisis.
With Covid-19 concerns rising and the US presidential election next week, gold and silver will be highly volatile, say analysts.
Since hitting a record in August, gold’s advance has faltered, with prices losing momentum amid gains for the dollar. Holdings in exchange-traded funds backed by bullion remain close to an all-time high though in recent days ETF inflows have been muted as investors awaited the price direction of gold.
"ETF investors also moved to sidelines after recent outflows awaiting fresh cues. Gold’s sharp fall in last few days has dented market sentiment while US dollar index continues to hold on to recent gains. We however expect to see choppiness in financial market amid positioning for US elections," Kotak Securities said in a note. (With Agency Inputs)