Demand for physical gold moderated this week in India as many jewellers held off on purchases ahead of the end of the country's financial year to pay off advance taxes, while premiums in Singapore rose slightly on tight supplies.
"As just a few days are left in the current fiscal year, many consumers (jewellers) are paying advance tax," said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji. "Even next week demand will remain subdued and could improve in April," Jain said. The Indian financial year runs from April to March.
Dealers in the country were charging a premium of up to $1.5 an ounce over official domestic prices, down from last week's $2 level. The domestic price includes a 10 percent import tax.
The market is in premium due to lower gold imports in February, said a Mumbai-based bullion dealer with a gold importing bank. Gold imports in February fell 10.81 percent from the same period last year to $2.58 billion, trade ministry data showed earlier this month.
Will policy reforms save jewellery industry's declining imports? CNBC-TV18's Manisha Gupta speaks to Arvind Sahay, Professor at IIM Ahmedabad.(With inputs from Reuters)