US demand for gold squeezes India's supply

Gold leasing rates in India have doubled within a month to a record high, following the overseas market, where rates jumped due to a supply crunch as global banks divert the precious metal to the US, industry officials said.

- Reuters

Higher leasing rates are driving up jewellery production costs in the world's second-largest gold consumer and could squeeze margins of jewellers such as Titan, Kalyan Jewellers, and Tribhovandas Bhimji Zaveri.

Gold leasing rates, which traditionally hover around 1.5% to 3%, have more than doubled in a month and could rise further, Shekhar Bhandari, president and business head of Kotak Mahindra Bank said.