Gold coins are selling at a Rs 100 per 10 gram premium since Guru Pushya Nakshatra, one of the most auspicious occasions for buying precious metals in western Indian states. The festival was on last Thursday.
Sources say traders are demanding a premium by creating an artificial shortage of gold coins, saying that supply from Europe has been interrupted due to snowfall.
Although flights from Europe started last Friday after about four days, the supply remained tight during the festival season.
According to trade sources, availability of gold coins was scarce and surpassed the demand a couple of days ago. Indian traders, mostly banks, import mainly Swiss-make gold coins. An estimated 90-95 per cent of all gold coins sold in India are sourced from Switzerland.
"The supply is normal. But, the demand has remained bullish even after the festival. Amid expectations of higher prices, both individual consumers and investors are booking gold coins, which now account for 25 per cent of overall gold sales," said Prithviraj Kothari, director of Riddi Siddhi Bullions Ltd and president of the Mumbai-based trade body, the Bombay Bullion Association.
The demand of coins has been bullish since gold prices surpassed Rs 20,000 per 10 gram. Now, consumers had understood that prices would remain high for some more time, leading to fresh buying, said Kothari.
Many bullion traders, however, termed the premium as a making charge. But, jewellers have never levied such a charge on gold coins in the past under normal circumstances. It is charged only in case of shortage.
via [Rediff.com]
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