Demand for physical gold in India picked up slightly this week, despite a recovery in prices, as jewellers stocked up ahead of the festive season, while activity remained subdued elsewhere.
Indian dealers were charged a premium of up to $4 per ounce over official domestic prices, inclusive of 6% import and 3% sales levies, compared to last week’s offers that ranged from a $2 discount to a $3 premium.
“Jewellers were sitting on the sidelines for weeks, but with prices refusing to correct much, they’ve now started buying for the upcoming festive season,” said a Chennai-based bullion dealer.
The Dussehra and Diwali festivals, when gold buying is considered auspicious, will be celebrated in October this year.
Domestic gold prices were at around 102,000 rupees per 10 grams on Friday, after hitting a record high 102,250 rupees earlier this month.
“Gold’s been stuck around 100,000 rupees for three months now, and shoppers are finally getting used to it – they’re slowly coming back to the market,” a Mumbai-based bullion dealer with a private bank said.
In top consumer China, bullion traded at par to a $5 premium per ounce over the global benchmark spot price. Last week, dealers charged premiums between $3 and $8 an ounce.
“Volume in Shanghai Gold Exchange has been lacklustre, with only light participation from speculators and retail investors,” said Bernard Sin, regional director of Greater China at MKS PAMP.
“Gold in RMB terms remains at high levels, and with no clear catalyst to buy, there has been little follow-through demand. The absence of new import quotas has further dampened physical flows.”
In Hong Kong and Singapore, gold was sold at par to a premium of $2.50, respectively. In Japan, bullion changed hands at par with spot prices, according to a Tokyo-based trader.
“We are seeing more clients coming to sell. Buying has really gone down quite a bit because prices are at multi-week highs,” said Brian Lan, managing director at GoldSilver Central.
