Gold premiums in India, the world’s biggest buyer, more than doubled on speculation that government restrictions on bullion imports by banks to rein in a record current-account deficit would reduce supplies.
The fees jewelers pay dealers for bars jumped as high as $40 an ounce today from $17 to $18 yesterday, Bachhraj Bamalwa, a director at the All India Gems & Jewellery Trade Federation, said by phone from Kolkata. The Reserve Bank of India on May 13 limited imports by banks on a consignment basis to only those required to meet the genuine needs of exporters.
The biggest slump in prices in three decades last month led to shoppers crowding retail outlets across India to buy jewelry and coins, deepening concern that the nation’s current-account deficit, the broadest measure of trade, would widen from an all-time high. The rush to buy bullion caused a shortage of physical supplies, prompting importers to charge a hefty premium overLondon prices, according to Bamalwa.
“Banks have refused to deliver any gold except ordered previously, and bullion dealers are not accepting fresh orders,” Bamalwa said. “Whether the bankers and dealers will find another route to import and how they will go about it, it is very unclear.” Any impact from ...