The coronavirus epidemic continued to stifle activity in the physical gold markets in top bullion consumer China and Hong Kong this week, while demand was mixed in other Asian hubs. The death toll in mainland China reached 637 on Friday, with a total 31,211 cases, the World Health Organization chief said, while a Reuters tally showed 320 cases in 27 countries.
"Nobody wants to go out, especially in China. Gold is a luxury item, nobody wants to spend money on that, they want to buy masks and alcohol," said Ronald Leung, chief dealer, Lee Cheong Gold Dealers in Hong Kong.
Gold was sold at a premium of $2.5-$4.5 an ounce over the benchmark in China, little changed from the week to Jan. 24 before the Lunar New Year holidays, with most businesses still closed.
In Hong Kong, premiums of $0.30-$0.80 an ounce were charged versus flat to $0.40 premiums last week. "Despite some industries having resumed operations, it looks like activities will not return to normal levels even by mid-February. Chinese jewellery consumption may fall 40%-70% year-on-year in the first two months of 2020," said Samson Li, Hong Kong-based precious metals analyst at Refinitiv GFMS.
International benchmark spot gold prices traded between $1,546.90 and $1,591.46 per ounce this week There was limited buying in Singapore, with $0.50-$0.60 an ounce premiums being charged.
"We've not seen a demand slowdown with the virus situation ... The negative impact on an already slow global economy is also making gold an attractive safe haven," Silver Bullion sales manager Vincent Tie said. In Japan, gold was sold at a $0.50 an ounce premium to a $0.30 discount.
India saw demand pick up slightly as prices eased, with gold futures slipping to 40,000 rupees per 10 grams on Friday, moving further from the record high of 41,293 rupees hit last month, but many buyers held off on hopes of a steeper correction. Volatility in prices and the rupee has been confusing jewellers, said a Mumbai-based dealer with a bullion importing bank.
Comments
Comments are closed.