Physical gold traders in India braced for higher premiums on
Wednesday on expectations of lower supplies after the central bank extended ban
on imports of the yellow metal on consignment basis to trading houses. The Reserve Bank of India on Tuesday extended
ban on gold imports on consignment basis by government-run agencies like MMTC,
STC, PEC and other star trading houses after restricting banks last month, a
move triggered by 162 tonnes of imports in May, at least twice the normal
volume.
"Supplies will get more scarce... There won't be any
imports for the next two-three days until clarity comes on outright cash
basis," said Mayank Khemka, managing director of Khemka Group, adding
premiums would go up. Premiums ruled at $5-$6 an ounce on London prices, said a
wholesaler in Mumbai. On the Multi Commodity Exchange, gold futures edged
higher, hovering near their highest level in nearly a month due to a weaker
rupee. The actively traded gold for June delivery on the Multi CommodityExchange (MCX) was 0.23 percent higher at 27,070 rupees per 10 gram.
The rupee plays an important role in determining the landed
cost of the dollar-quoted yellow metal.
"Supplies have stopped from all sides... We will have smaller lots
coming in instead of larger lots due to cash payments," said Harshad
Ajmera, the proprietor of JJ Gold House, a wholesaler in Kolkata. Silver for
July delivery on the MCX was 0.23 percent higher at 43,865 rupees per kilogram.
Source : Economic Times
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