By Ben Kilbey
NEW DELHI: A myriad of factors are behind the present record discount for physical gold purchases in the world's number two consuming nation India, including government policy and a shift in consumer purchasing power/patterns, sources said over the weekend at an industry event in Agra, India.
The inaugural Bullion Federation conference set out to tackle issues facing the country's gold industry, with ministers and businessmen coming together to tackle various hurdles.
Bullion Federation secretary Haresh Acharya, also head of gold trade at Parker Bullion based in Ahmedabad, told S&P Global Platts that he is feeling very positive about ongoing discussions with the country's government.
Acharya is one of the founding members of the federation and is working hard to improve business conditions.
The Platts India 995 assessment has averaged minus $22/oz in 2016 so far, with the assessment at the deepest discount of minus $65/oz against dollar spot for parts of July.
There has been some modest improvement, or at least an easing in the discount, as the dollar price has come off the boil, but this has done little to spur demand.
PGPI 995 was assessed at minus $25/oz on July 22, from minus $40/oz July 21.
The July monthly average now sits at minus $51.67/oz.
On the sidelines of the event, all participants agreed that this is the worst phase in living memory, something Platts has been reporting for many months.
The Bullion Federation's key request from the government is to reduce the refined bullion import duty to 6% from 10%.
There are hopes by some that this could happen as early as August, although not all are convinced.