Gold premiums in India slip on easing demand but still near $100

Singapore: Gold premiums in India, the world's second biggest bullion consumer, slipped this week as demand eased on expectations of lower prices and relaxation in import curbs.

Premiums slipped to $100 an ounce over the global benchmark, from last week's $120-$130 an ounce, according to dealers. India celebrated its second-biggest gold buying festival of Akshaya Tritiya last Friday, which along with prevailing wedding demand caused a sharp jump in premiums.

India has imposed restrictions on gold imports last year to tighten its trade deficit, including a record 10 percent import duty, prompting scarce supplies and higher premiums. But speculation that the rules could be eased after the national elections this month has grown. " Jewellery demand is holding up to an extent but people have been putting off gold purchases on expectations that a new government will cut the duty and ease the rules," said Bachhraj Bamalwa, director with All India Gems and Jewellery Trade Federation, a grouping of more than 300,000 jewellers.

Bamalwa also stated that the Akshaya Tritiya sales were about 30 per cent lower than last year as consumers were putting off big purchases. In April 2013, gold prices fell over 10 percent in two days - the biggest such fall in 30 years. The sharp decline in prices sent consumers across Asia rushing to buy gold.