A war is brewing in the gold market with traders led by the All India Bullion and Jewellers Association complaining to the Reserve Bank of India (RBI) that its May 21 decision to allow premier and star trading houses to import gold for local sales has given half a dozen export houses a dominant position in the market and raised imports of the metal.

RBI, claimed one of the complainants from the trade, is likely to initiate action shortly, considering the sharp rise in imports has happened during the traditional slack month of June. The trading houses strongly contested the claims of traders. They say RBI's action had improved supplies, reduced the premium on gold, and that the traders' claims of the surge in gold imports are exaggerated.