Jewellers in India, the world's second largest gold consuming country after China, have started receiving more inquiries for purchase of gold or silver immediately after the Reserve Bank's announcement to withdraw Rs 2,000 notes from circulation. However, there is no panic buying of the precious metal unlike the situation witnessed in 2016 during demonetisation, jewellers body GJC said on Sunday. In fact in the last two days, the actual gold purchase has been less in exchange of Rs 2,000 notes due to strict Know your Customer (KYC) norms although sources said some jewellers have started charging a 5-10 per cent premium, taking the gold prices to Rs 66,000 per 10 grams level.
India has imposed several restrictions on imports of gold, the biggest non-essential import item, to curb a record trade deficit.
India celebrated Dhanteras, the biggest gold buying festival, followed by Diwali, when scarcity of the yellow metal and high prices pushed consumers to buy silver and diamond jewellery.
Sales of gold coins and bars should be curbed after reaching around 300 tonnes
Jewellers went on strike for three days from March 2.
In China, premiums fell to about $1.50 an ounce on Friday from $2-$3 an ounce.
Non-resident Indians are bringing gold into the country by taking advantage of rules that allow each individual to carry 1 kg of the metal, helping traders cope with restrictions on imports during the peak wedding season.
Spot gold fell as far as $1,142.10 an ounce on Thursday, its lowest since November 2014.
Indian gold demand seen falling to 8-year low in festive quarter.
Regaining the lost sheen, sales of gold jewellery and coins are set to touch pre-COVID levels in volume terms on the auspicious Dhanteras as easing pandemic concerns and pent up demand saw consumers flocking to stores to buy the precious metal. Increased footfall at stores and brisk sales online as well as relatively softer gold prices compared to record Rs 57,000 per 10 grams level in August spurred increased buying, especially light weight offerings, on Tuesday. Dhanteras is considered to be auspicious for buying precious metals and other valuable items.
Gold bullion purchases across Asia slowed this week as a long rally in prices discouraged buyers.
Concern would kick in if imports stay at or over 100 tonnes a month.
By tying gold imports directly to export volumes, India is effectively trying to cap how much bullion can be brought into the country, tightening supplies and driving up local prices.
Gold is currently ruling at Rs 30,050 per 10 grams.
The best way to curb gold demand is by reducing black money in circulation.
It was unclear how bankers were deciding which jewellers to support
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