Amid positive global cues, gold prices surged by Rs 300 to reach Rs Rs 32,150 per 10 gram at the bullion market on Thursday, PTI reported. The other reason that is supporting the rise is continue buying by the local jewellers. Even silver rates were on rise backed by an increased offtake by industrial units and coin makers. Silver reclaimed the Rs 40,000-level per kg by gaining Rs 240. PTI reported citing unidentified traders that continued buying by local jewellers to meet retailer demand in the domestic spot market is pushing up prices of the yellow metal. PTI reported citing unidentified experts that imports of gold turned costlier in wake of depreciated rupee in comparison to dollar.
Meanwhile, gold imports in the month of March halved to 52.5 tonnes from a year ago period as hike in local prices to 16-month high cut down demand in India. Experts say that lower gold imports could help the country to reduce its deficit which plunged in five months in February.“Higher prices and weak demand from rural areas squeezed imports,” Reuters reported citing Sudheesh Nambiath, a senior analyst with GFMS.
India’s two-thirds demand for gold comes from the rural areas. In rural areas jewellery is considered traditional store of wealth. The plunge in gold purchases by India, though, could weigh on global prices, which are still up nearly 8 percent from a mid-December trough, despite dropping back from a 17-month high hit at end-January.