However, a finance ministry spokesman declined to comment on the report.
Gold premiums in India jumped to two-year highs last week as jewellers ramped up purchases on fears the government might restrict imports after withdrawing higher-denomination notes from circulation in its fight against black money.
India is the world’s second biggest gold buyer, and it is estimated that one-third of its annual demand of up to 1,000 tonnes is paid for in black money – untaxed funds held in secret by citizens in cash that don’t appear in any official accounts.
The move to withdraw higher denomination notes has already started to disrupt cash-based gold smuggling, officials have said.
Scrap gold supplies were also set to halve this quarter as the cash crunch and falling prices make it difficult for consumers to liquidate their holdings.
PM hits out at critics of demonetisation scheme
Meanwhile, attacking political rivals and those opposed to the demonetisation scheme, Prime Minister Narendra Modi today lashed out at them saying they would have lavished praise on him if he had given them time before announcing the move.
“Some people are criticising saying the government did not make ample preparation. I think that is not the issue that the government did not make ample preparation. I think the pain of such people is that the government did not give a chance to make any preparation,” he said at a book launch function .
“If these people had got 72 hours to make their preparation then they would have lavished praise that there is no one like Modi,” he stressed.
The Prime Minister’s remarks come amid a standoff in Parliament on the issue with the opposition stepping up their attack on the government. Former Prime Minister Manmohan Singh had yesterday said the step was “a case of organised loot and legalised plunder” and reflected a “monumental management failure”.