Gold importers in India, the world's biggest buyer of the metal, remained on the sidelines on Wednesday as they awaited clarity from the government on operational issues for shipments. To keep a lid on record trade deficit, the central bank tied gold imports for domestic use to exports, helping cut imports available to the local market by 60 percent. The government has also raised the import tax twice in 2013 to 8 percent."There is a problem with supply...," said Bachhraj Bamalwa, director of the All India Gems and Jewellery Trade Federation, adding stocks, which could take care of a week's demand, were available in the market. Premiums are steady at $35 an ounce on London prices, Bamalwa said.
The current circular is unclear on various operational matters like monitoring, on which clarifications have been sought, importers said. "Since we are not importing, no one is calling us," said a dealer with a private bullion importing bank in Mumbai. At 1030 GMT, the most-active gold for October delivery on the Multi Commodity Exchange (MCX) was 0.88 percent lower at 27,570 rupees ($450) per 10 gram, following weak overseas markets. A weaker rupee, however, kept the downside in prices limited. The rupee plays an important role in determining the landed cost of the dollar-quoted yellow metal. Silver for September delivery on the MCX was 1.48 percent lower at 40,920 rupees per kg.