BENGALURU/ MUMBAI: Premiums on physical gold in China jumped to the highest since December 2016 this week as economic worries spurred fresh safe-haven demand, while lower domestic prices brought back some buyers in India.
In top consumer China, gold was sold at premiums of between $33 and $43 an ounce over global prices, up from $20-$35 last week.
Lower prices were aiding demand, said Bernard Sin, regional director, Greater China, at MKS PAMP. Chinese traders were gravitating towards the asset as a safe-haven store of value as worries escalated over the country’s real estate sector, he added.
Global benchmark spot prices dropped to their lowest in five months to $1,883 an ounce on Thursday on prospects of US interest rates being higher for longer.
Analysts also flagged the absence of new import quotas issued by the People’s Bank of China to commercial banks contributing to the high premiums. In India, a pickup in demand spurred by a drop in local prices, which fell to their lowest since July 6 at 58,275 rupees per 10 grams on Thursday, allowed dealers to charge premiums for the first time in over two months.
“There is modest demand in the market since prices have come down,” said Harshad Ajmera, proprietor of JJ Gold House, a wholesaler in Kolkata.
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