A price rise in gold hurt physical gold demand in India while premiums for the yellow metal dropped. Dealers charged a premium of up to $1.5 an ounce this week over official domestic prices , down from last week’s premium of $3, according to a Reuters report. Gold rates in India include 10.75% import duty and 3% GST.
Gold futures on MCX closed near three-week high of ₹48,000 per 10 gram on Friday, supported by positive global cues. But the sudden price jump hurt gold demand in India, Reuters reported citing a gold wholesaler.
Concerns about the delta variant of coronavirus helped gold, seen as a safe-haven asset, log its third straight weekly gain in global markets, rising 0.3% to $1,807.65 an ounce.
On the other hand, weighing on gold is prospect of Fed monetary tightening. “FOMC minutes released earlier this week showed that various policymakers felt conditions for reducing the central bank’s asset purchases would be met somewhat earlier than they had anticipated. ETF outflows also showed weaker investor interest,” Kotak Securities said in a note.
“Gold has witnessed volatile trade in last few days and this may continue as market players assess Fed’s monetary policy outlook as well as other market developments. However, the general bias may be on the downside as diverging monetary policy outlook may continue to support US dollar,” the brokerage added.
The next tranche of sovereign gold bonds will open for subscription from July 12 – 16, 2021. The RBI has fixed ₹4,807 as issue price per gram of gold. Investors who apply online and make payment online get a discount of ₹50 per gram.
For such investors, the issue price of Gold Bond will be ₹4,757 per gram of gold.
A total of ₹25,702 crore has been raised through the Sovereign Gold Bond (SGB) Scheme since its inception till end-March, according to the RBI annual report.
The scheme was launched in November 2015 with an objective to reduce the demand for physical gold and shift a part of the domestic savings — used for the purchase of gold — into financial savings. (With Agency Inputs)
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