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Indian Gold Premium Drops 50%

|Includes:SPDR Gold Trust ETF (GLD)

As I wrote here exactly a week ago, I saw that Indian gold premiums would fall. And they did.

Premiums have indeed dropped from $90/ounce to $30/ounce, that's more than a 50% drop.

So with premiums of gold going back to this low level, gold jewelry will be cheaper for the people to buy and I expect pent-up demand to come back.

As you can see on this chart, the premiums have come back to the 2012-2013 level of $30/ounce.

Local gold price premiums

This also means that the India gold import trade will go back to the 2012 levels. I expect that the official numbers will double. This will add at least another 30 tonnes/month of demand from India, which balances the recent decline in demand from China.

India Gold Trade (In Gold We Trust: Koos Jansen)

Stocks: GLD