Some global gold-supplying banks have reduced their shipments to India due to the ongoing festive season, citing bank executives and vault operators. Some people familiar with the situation told Reuters that many of these institutions are in favour of focusing on China, Turkey, and other regions that may potentially give greater premiums ahead of significant holidays in India, reported Reuters.
According to the same article, this approach may lead to shortages in the world’s second-largest gold market. Due to the shortage, Indian customers may have to pay substantial premiums for supply, as demand is expected to be strong over the current festive season.
ICBC Standard Bank, JPMorgan, and Standard Chartered are among the top gold providers identified in the research. These providers often import extra gold over the holiday season and then store it in vaults to fulfill demand as it emerges.
A Mumbai-based vault official told Reuters, “Ideally a few tonnes of gold should be there in vaults during this time of the year. But now we only have a few kilos.”
As the premiums debate heats up, it’s worth noting that in India, premiums over the international gold price benchmark have fallen to $1-$2 an ounce, down from over $4 this time last year.
