Gold prices in India moves to premium from discount ahead of festive season1 min read . Updated: 11 Oct 2020, 11:00 AM IST
- Gold prices in India have corrected significantly from August highs of ₹56,200
- Jewellers stocked up ahead of the festive season
Physical gold was sold at a premium in India this week amid hopes that key festivals will help a pickup in retail demand. This is the first time since mid-August that physical gold was sold at a premium in India. Dealers charged premiums of $2 an ounce over official domestic prices as compared to last week's $6 discounts, Reuters reported.
Jewellers have started making purchases for festivals on hopes of some revival in demand, said a gold dealer. On MCX, gold futures closed the week at ₹50,817 per 10 gram.
The government has also come up with sovereign gold bonds that will open for subscription on Monday. The Reserve Bank of India, on behalf of government of India, has fixed issue price at ₹5,051 per gram of gold. The issue will close on October 16.
Gold prices in India have corrected significantly from August highs of ₹56,200, with global rates impacted by movements in the US dollar. But analysts say that strong demand for gold as a safe-haven asset is likely to continue at least until the global economy is back on a solid recovery path.
In India, the investment demand for gold however remained strong. Gold ETF category continued to receive net inflows in the month of September too. That made it an uninterrupted net inflow for six months in a row. According to Amfi, the gold ETF category received net inflow of around ₹907.9 crore in August and a net inflow of ₹597.3 crore in September.
Gold climbed more than 1% on Friday as the dollar retreated to a near three-week low and increased bets for fresh U.S. stimulus pushed investors to bullion as a hedge against likely inflation.
Gold prices in India rose ₹650 on Friday, supported by a softer US dollar and hopes of a stimulus US stimulus package. Near-zero interest rates and unprecedented money printing by central banks have lifted gold prices significantly this year in global markets. In India, prices rallied 29% so far this year. (With Agency Inputs)