Gold premiums in India are likely to double compared to the current level ahead of the holidays, which begin next week. Also during this period, a significant increase in gold imports is expected.
According to the Indian Bullion and Jewelery Association Ltd (IBJA), in the last quarter of this year, gold imports will increase by 50% - up to 75 tons. Between June and August, an average of 60 tons per month was imported.
Gold sales are projected to grow by almost 20% this year during the holidays. Gold premiums are likely to double compared to the current level.
The Dantheras festival, which precedes Diwali's "festival of lights" and is characterized by large-scale purchases of gold, this year will begin in October. Also in October in India, the wedding season begins, it will last until early next year. The late rainy season that started this year has already led to an intensification of gold trade in rural areas.
The government fears that the increased demand for metal will lead to an increase in imports, which will negatively affect the current balance of payments deficit.
For this reason, the Indian government does not intend to change the "80:20 rule" in the near future with respect to gold imports.