Gold price decline boosts sales, dealers strike it rich

Premiums jump to $7 an ounce

Physical gold demand in India this week surged as local prices dropped to their lowest since June last year, with buying expected to pick up in other Asian centres after the Chinese Lunar New Year holiday week.

Dealers were charging a premium of up to $7 an ounce over official domestic prices, the highest in eight months.

Last week they were charging a premium of up to $5 inclusive of 12.5% import and 3% sales levies.

“Sales are robust. People are buying coins, bars and jewellery because of price correction,” said Chanda Venkatesh, managing director of CapsGold, a bullion merchant based in Hyderabad.

Supplies are limited but demand is robust from jewellers, who are keen to build inventory for the festival and wedding season, said a Mumbai-based dealer with a bullion importing bank.

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