Premium on gold plummets; traders’ strike impacts jewellery sales

KOLKATA: Premium on gold has plummeted to $5 - $7 from $30 - $35 per ounce as Indian gold trade wants to liquidate their gold stocks due to lack demand for the yellow metal in the market. The ongoing strike by the gold trade protesting the imposition of 1% excise duty on gold and diamond jewellery has affected jewellery sales in the country in last 37 days. This trend is unusual the day before Gudi Padwa when premiums go up on gold and push up the price of the yellow metal in the domestic market.

Talking to ET, Saurabh Gadgil, vice-president, India Bullion & Jewellers Association said "The gold trade has taken the decision to go in for a complete strike on today and tomorrow. It s being heard that prime minister Narendra Modi may call the jewellers on April 9 to discuss the excise issue. Let us see how things go. But there will be hardly an sales during Gudi Padwa this year." Gudi Padwa is considered as an auspicious day in Hindu calendar when Indians prefer to buy gold.

Meanwhile, in the morning session gold for June contract on MCX inched up by 0.23% to Rs 28712 per 10 gm. It touched a high of Rs 28,810 per 10 gm. Yesterday's close for the yellow metal was Rs 28,646 per 10 gm. "Outlook for gold continues to remain choppy," said Hareesh V, senior analyst, Geofin Comtrade.