India Premium
UBS AG said April 23 that physical-gold flows to India, the world’s biggest importer, approached the highest since 2008, while Standard Chartered Plc said shipments last week were 20 percent above a previous record.
The surge in demand is forcing jewelers to pay a premium of as much as $10 an ounce for immediate delivery, compared with $1 an ounce to $1.5 before the price slump, said Mehta. The precious metal may drop to $1,370 within three months if funds continue to exit gold-backed securities, he said.
Holdings in the SPDR Gold Trust, the biggest bullion-backed exchange-traded product, are set for the largest monthly decline since trading began in 2004. Russia and Kazakhstan expanded reserves for a sixth month in March, International Monetary Fund data show.