MUMBAI Oct 19 Gold prices in India swung to a
premium for the first time in nine months on Wednesday as
jewellers and dealers in the world's No.2 consumer of the metal
ramped up purchases ahead of major festivals.
Dealers were charging up to $2 an ounce over official
domestic prices, the first time premiums have been seen since
mid-January, said Bachhraj Bamalwa, director at the All India
Gems and Jewellery Trade Federation.
Gold importers have traditionally charged premiums to
mitigate risks they take due to currency and price fluctuations.
But the precious metal had been trading at a discount for
most of this year due to weaker-than-usual demand and a rise in
smuggling. Discounts hit a record high of $100 an ounce in July.
"In the last 10 days, demand has improved due to festivals.
The correction in prices is helping to attract buyers," said
Gold prices in India have fallen over 8 percent
since hitting a peak of 32,455 rupees ($485) per 10 grams in
July, the highest level in nearly three years.
Demand for gold usually strengthens in the final quarter as
India gears up for the wedding season as well as festivals such
as Diwali and Dussehra, when buying the precious metal is
($1 = 66.6950 Indian rupees)
(Reporting by Rajendra Jadhav; Editing by Joseph Radford)