You are here: Home » Markets » Commodities » Precious Metals
Business Standard

Gold imports came to halt as discounts widened

High discounts are due to huge carry over stock of gold imported in November

Rajesh Bhayani  |  Mumbai 

Gold import in India has halted in recent days, with the market offering a widening discount over prices in London, now at $12-15 an ounce or Rs 240-300 per 10g.

When demand is good, importers charge a premium over London prices. With this not so, they would like to offload their stocks; holding the metal is costly. The present discounts are due to a huge carryover stock from imports in November, when 151 tonnes came in, far above India’s normal monthly demand.

Only 39 tonnes of gold was imported in December, when the marriage season had paused. The latter has restarted after January 14 but most of the buying was done when prices were lower in October-November. Now, demand is also absent as global prices have shot up to $1,300 an oz.

A person working closely with gold importing agencies said the high discounts had led to a halt in imports. The price in India is determined on the cost of imports and the margins in these are thin. The prevailing discount of one per cent makes these unviable. This month so far, only 15-20 tonnes might have come in.

The price was around $1,200 when most imports took place and selling that stock even at a discount generates good profit, as gold is now around $1,300 an ounce.

On the spot market here, gold closed at Rs 28,290 per 10g, up Rs 130 from Thursday. Silver closed at Rs 40,100 a kg.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Fri, January 23 2015. 22:46 IST
RECOMMENDED FOR YOU
.