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Cartels may be keeping domestic gold prices high

October 30, 2013 11:31 IST

Cartels may be keeping domestic gold prices high

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Rajesh Bhayani in Mumbai

A cartel is said to be at work in the gold trade, to keep prices in the domestic market at an artificial high.

Traders and some big exporters, say sources, are shipping abroad gold meant for the home market, where there are now several curbs on import.

This has resulted in premiums for physical delivery of as high as $100 or Rs 1,800-2,000 per 10g.

While spot gold is quoting at $1,350 an ounce in the global market, it sells at home for Rs 1,600 an ounce, including taxes.

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The premium over the landed cost is taken by the bullion dealer who sells and the importing banks.

In each of the past two quarters, say sources in the trade, export of gold jewellery has been 35-40 tonnes.

Official import of gold in the July to September quarter was 62 tonnes.

“At a time when gold imports are drying up, diverting it for export will aggravate the situation,” said a Mumbai-based jeweller.

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Consignments for shipment are also said to be going to third parties for a premium.

Jewellers have been unable to import the amounts they need for local consumption in recent months, due to the stricter official curbs on inflow, with domestic use of what is imported being tied to exports.

Till gold import norms are liberalised, say those in the trade, consumers would have to pay a high price.


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