Gold demand in India remained tepid this week despite a recent correction in prices, as buyers postponed purchases in the absence of any major festivals, while premiums in top consumer China slid on weak consumer sentiment and elevated spot prices.
“Retail buying is not picking up. Buyers are hoping prices will fall further and are delaying purchases,” a Mumbai-based dealer with a private bank said.
In India, the world’s second-largest gold consumer and a major importer, domestic prices were trading around 71,500 rupees per 10 grams on Friday, after hitting a record high of 74,442 rupees last month.
Indian dealers offered a discount of up to $10 an ounce over official domestic prices, inclusive of 15% import and 3% sales levies, versus last week’s discount of $14.
The wedding season is nearly over so jewellers are not in a hurry to replenish inventories, an Ahmedabad based dealer said.
In China, dealers charged premiums of $18-$26 per ounce over international spot prices this week compared with $27-$32 last week.
Asia Gold: Price dip fails to spur India retail demand; China premiums dip
“Chinese jewellery sales face a double threat: weak consumer sentiment and rising gold prices. Lower spending, particularly in inland areas, could dampen overall sales,” Bernard Sin, regional director, Greater China, at MKS PAMP said.
Top consumer China’s central bank held off gold purchases for its reserves last month after 18 months of consecutive buying, official data showed last week.
“Who doesn’t rest after running a marathon? Central banks around the world are still buying gold and China won’t be an exception,” Hugo Pascal, precious metals trader at InProved said.
Industry officials at the Singapore metals conference this week said demand for gold in Asia is surging despite prices hovering near the record highs hit in May, as buyers snap up the metal to hedge against geopolitical and economic uncertainty.
Gold was sold at par to $2.10 premiums in Singapore and at par to $2 premiums in Hong Kong.
In Japan, bullion was sold at $0.25-$0.50 premiums, unchanged from last week.