Gold finds more takers as prices dip

“Retail demand has been gaining momentum. Showrooms, especially in small towns, are witnessing good footfalls,” said Amit Modak, chief executive officer at jeweller PN Gadgil and Sons.

Low domestic prices raked in demand for physical gold in some Asian hubs this week, with fresh retail interest also allowing dealers to charge higher premiums in India.

Local gold futures in India traded around Rs 44,400 per 10 grams on Friday, near a one-year low of Rs 44,150 they touched earlier in the week.

“Retail demand has been gaining momentum. Showrooms, especially in small towns, are witnessing good footfalls,” said Amit Modak, chief executive officer at jeweller PN Gadgil and Sons.

Dealers charged premiums of $6 an ounce over official domestic prices, inclusive of 12.5% import and 3% sales taxes, compared with last week’s premium of $5.

Jewellers have been replenishing inventory as sales have improved significantly in the last few weeks, said a Mumbai-based dealer with a bullion importing bank, adding investors have started coin and bar purchases at current rates.

In Singapore, $1.60-$2.50 premiums were charged over benchmark spot gold prices, compared with last week’s $1.60-$2.

“Quite a few customers – more so from the retail and wholesale side, including high net worth individuals – picked up gold because prices are lower,” said Brian Lan, managing director at dealer GoldSilver Central.

As for silver, refineries and mints continued to grapple with a backlog of orders, Lan added.

In China, premiums rose to $8-$10 an ounce from $6-$7 last week, dealers said.

There was some safe-haven buying as well, said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.

Gold was sold at premiums of around $0.80-$2.50 an ounce in Hong Kong, while lower prices also boosted demand in Japan, which saw premiums of $0.75.

Bangladesh cut gold prices for the second time this month, with the best quality gold priced at 69,109 taka ($817.47) per Bhori (11.664 grams), amid lower global rates, the Jewellers’ Association said. ($1 = 84.5400 taka)

Courtesy: Economic Times