Physical gold demand improved in some Asian hubs this week as a dip in prices attracted buyers, with premiums in India hitting a 17-month high as jewellers stocked up ahead of the festival season.
The higher demand allowed dealers in India to charge premiums of up to $5 an ounce over official domestic prices, inclusive of 15% import and 3% sales levies, up from last week’s $4 premiums.
“Retail and wholesale demand is improving because of the price correction. We have been witnessing good traction in the last few days,” said a Mumbai-based bullion dealer with a private bank.
Local gold prices fell to 56,075 rupees per 10 grams this week, and were hovering near their lowest levels since March hit last week.
Jewellers were making purchases anticipating a price correction would boost retail demand during the upcoming festival season, said a New-Delhi based bullion dealer.
Asia gold: Price dip buoys demand in India; China premiums ease
Demand in India, the second biggest-gold consumer after China, usually strengthens towards the end of the year, during the traditional wedding season and major festivals including Diwali and Dusherra, when bullion buying is considered auspicious.
In Hong Kong, bullion was sold at premiums of $0.50-$3.50, and at $1.50-$3.25 in Singapore.
The price dip spurred a pickup in demand, especially from retail clients and wholesalers, said Brian Lan of Singapore dealer GoldSilver Central.
Global spot prices were trading around seven-month lows.
Meanwhile, Chinese markets were closed for the Golden Week holiday. Gold premiums in China had eased last week after hitting record highs in September, attributed to a lack of quotas to import gold into the top consumer.
“I expect the gold premium to continue its volatility when trading resumes. PBOC are prepared to intervene if needed. Given China’s firm commitment to protecting the yuan, gold market will be closely monitored during the reopening,” said Bernard Sin, regional director, Greater China at MKS PAMP.
In Japan, dealers sold gold at $0.5-$1 premiums.
Comments
Comments are closed.