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Gold premiums supported by supply crunch

Source : REUTERS
Last Updated: Thu, Aug 01, 2013 11:40 hrs
Gold

Gold premiums remained supported on Thursday as importers halted shipments, creating a supply shortage in the market.

India's imports of gold have halted since July 22, sending premiums for scarce stocks soaring, as traders in the world's biggest bullion buyer try to puzzle out new central bank rules that tie imports to export volumes.

"Manufacturing is disturbed... there is no gold available in the market. Banks are not willing to clear any consignment because they are not clear about process and documentation," said Haresh Soni, chairman of the All India Gems and Jewellery Trade Federation. Premiums were steady at $40 an ounce on London prices, added Soni.

June imports fell nearly 81 percent to 31.5 tonnes from a record 162 tonnes in May, although Finance Minister P. Chidambaram said imports had risen again in July, without giving any details.

India is hoping to contain gold imports well below 845 tonnes shipped last year, Chidambaram said.

The most-active gold for October delivery on the Multi Commodity Exchange (MCX) was flat at 28,055 rupees per 10 grams. The contract rose to a near four-month high of 28,676 rupees in the previous session.

Silver for September delivery on the MCX was 0.18 percent lower at 41,445 rupees per kg.

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