Gold premiums in India jump from $100 to a record $150 over spot – a year ago it was JUST $3

In the middle of October we reported that physical supply of gold in India was so tight premiums (the price actually paid for gold over the ‘spot’ price) were a staggering $100. We wrote:

With the paper price of gold being smacked each way to sunday, it’s worth remembering that if you tried to pick up and ounce of physical for anywhere near spot you’d be doing very, very, well.

Just go ask the average Indian investor, who according to Reuters, are now having to front up $100 OVER spot, as premiums (the amount you pay over spot) just hit a record high in India…

That’s right, the real price of an ounce in India is actually around $1380, not the $1280 ‘spot’ price you see today.

The reason? Thanks to all those government actions to manipulate demand lower, “there are no supplies in the domestic market”…

...But just ignore all this, gold is simply a barbarous relic that nobody on the planet wants anymore… apart from the Chinese… and the Indians… and the Russians – that’s nearly 3bn people for those counting, just under half the total world population. But we’re sure they’re not important.

Now this was back when the price of gold was trading around the $1280 – since then the sport price of gold has rallied some $70 to around $1350. You would be forgiven for thinking that this rise in the spot price would alleviate the premiums being paid in India for gold – but you would be wrong, dead wrong in fact.

As the WSJ is reporting premiums have RISEN again in India to a new record high of $150 OVER spot:

NEW DELHI—Choked-up supplies and festival-season demand are leading Indian gold buyers to pay big margins over its international price to ensure immediate delivery.

Bulk consumers such as jewelers are paying up to $150 a troy ounce over the international price, local traders said, compared with about $3 a year ago and $50 a couple of weeks ago.

That’s right, just a one year ago the price Indians paid for gold was just around $3 over spot – today it is a nose-bleeding $150, a new record high. Which means that in India right now the real price for an ounce of gold is actually $1500.

Clearly the most recent smack-down in gold (now fully reversed after that ‘mystery’ large seller has disappeared) has uncovered huge global (Eastern) demand – and the fact that premiums are now up nearly 5000% in one year is yelling this to you loud and clear.

Look for premiums to stay very elevated whilst the gold price remains below $1450/$1500, and also look for the spot price to ‘catch-up’ to the reality of the actual price of gold in the coming weeks.

Link to this article: : http://www.goldmadesimplenews.com/gold/gold-premiums-in-india-jump-from-100-to-a-record-150-over-spot-a-year-ago-it-was-just-3-12070/

Posted by on Oct 25 2013. Filed under Gold News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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