Gold-supplying banks have cut back shipments to India ahead of major festivals in favour of focusing on China, Turkey, and other markets where better premiums are offered, three bank officials and two vault operators said. That could create scarcity in the world’s second-biggest market for gold, and force Indian buyers to start paying hefty premiums for supplies in the approaching peak-demand season. Leading gold suppliers to India — which include ICBC Standard Bank, JPMorgan and Standard Chartered — usually import more gold ahead of festivals and store it in vaults. But vaults now hold less than 10% of the gold they did a year ago, the sources said.

“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,” said one Mumbai-based vault official. JPMorgan, ICBC and Standard Chartered declined to comment.

In India, premiums over the international gold price benchmark have slid to $1-$2 an ounce, against around $4 this time last year. Premiums were driven sharply lower by a now-closed loophole that led some Indian trading houses to import gold as lower-tariff platinum alloy, allowing some to even offer gold at a discount, Chanda Venkatesh, managing director of Hyderabad-based bullion merchant CapsGold, said.

Rupee bounces back to close at 82.79 against USD

The rupee rebounded from its lifetime low to close 21 paise higher at 82.79 against the US dollar on Thursday, Oc atober 20, mid weakness in the greenback overseas. Forex traders said the local currency recovered on suspected RBI intervention after hitting a record low of 83.29 during the session.

However, rising crude oil prices in the international market capped the rupee’s gain, they added.

At the forex market, the local unit opened weak at 83.05 against the greenback but later lost ground to quote at 83.29. It also touched an intra-day high of 82.72.

The rupee pared all its losses to end at 82.79, registering a gain of 21 paise over its previous close. In the previous session, the rupee had settled at an all-time low of 83 against the dollar.

In the domestic equity market, the 30-share BSE Sensex rose 95.71 points or 0.16 per cent to close at 59,202.90, and the broader NSE Nifty climbed 51.70 points or 0.30 per cent to 17,563.95.