Gold prices move from discount to premium for the first time this year! The yellow metal has been selling at a premium for the first time this year. The metal saw steep imports and a near halt in smuggling which caused unemployment and a stark rise in its price across Asia. As per reports, there was a dive of 86% in India’s gold import due to its high price and a ban on the international travel.
After effects of unemployment and limited import!
Also, due to the rising cases of unemployment in the country, there has been a drop in the demand for gold in the market. This has further forced the dealers to charge premium from their customers. This was in view of the fact that there was very less import happening plus its smuggling has nearly stopped.
Dealers charging premium!
This week domestic costs in future market rose to record high of about 49,500 per ten grams. Up till now this year, gold costs in Bharat have risen to 25%, tracking a rally in international rates and rupee’s depreciation against American dollar. On Friday, gold costs settled at about 48,900 per ten gram on MCX. The domestic value includes a 12.5% per cent import tax and 3% excise.
Gold is generally considered to be a safe asset; many traders have sought shelter of the gold. It was out of fear that the lockdown would derail the economy of the world. But the problem lies in its investment demand which was really high in the Indian as well as other markets.
Chinese being at the top of the market for gold consumption, also saw a drastic decline in the consumption of gold which further led them to sell it at hefty discount rates versus global benchmark spot prices.
Gold prices move from discount to premium for the first time this year! With the marriage season approaching, high gold costs could keep overall sentiment weak, as witnessed throughout the recently terminated festive season.
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