The premium for gold in Mumbai remains solid, with demand ahead of the annual Akshaya Tritiya festival in April starting to pick up momentum.
Gold for immediate delivery in the Indian capital remains around $5 over the London spot price, sources said, though some have cited it at around $2 in some places.
The market is now entering a peak demand season and jewellers are already busy, Metals Focus’ Chirag Sheth said.
Still, farmers are reportedly assessing potentially widespread damage to crops following unseasonal hailstorms in North and West India around two weeks ago.
Smaller harvests may weigh on gold demand over the coming months – India’s 120 million farmers account for around 60 percent of domestic consumption.
The country’s monsoon season, which accounts for around 70 percent of annual rainfall, is not due to start until June.
With Akshaya Tritiya fast approaching, demand should push premiums to around $7-8 in Mumbai, Sheth said. The festival is of the most auspicious periods of the year to gift gold.
As much as 60 tonnes of the yellow metal may have entered the country during March after 55 tonnes in February to support pre-festival demand, sources estimated.
Elsewhere, the premium for gold in Shanghai also remained high, sources said, despite the climb in price to $1,190 following dovish comments from US Federal Reserve chair Janet Yellen last week on the state of the US economy.
Gold for immediate delivery in Shanghai was quoted at $5 over the spot price by MKS, with demand said to be stable.
Withdrawals from the Shanghai Gold Exchange – a useful barometer for wholesale demand – for the week ending March 13 were 51.46 tonnes. More than 500 tonnes have passed through the vaults in 2015 so far.
In Tokyo, assessments of market conditions have been contradictory. While some sources suggested that the metal is at a slight discount of around 50 cents-$1 due to the forthcoming end of the financial year – many companies are keen to get the metal off their books – others have suggested that the metal is at a slight premium of $1.
In Turkey, the market remains at parity, according to Troy Precious Metals GoldTakas system. Demand should pick up in May or June on the favoured .995 LBMA 1kg gold bar when the annual Turkish wedding season begins – premiums of $2-3 are expected, it said.
In Dubai, premiums are up to $1 on the .9999 bars, while .995 is slightly cheaper, sources said.
In other locations, Hong Kong sources suggested that the premium is at $1 over spot, while in Singapore it is at $1.50 and at around $1.50-2 in Bangkok.
(Editing by Mark Shaw)
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