Indian gold dealers hope for festive jolt to quiet market

Physical gold demand across top Asian hubs was largely muted this week as a rebound in domestic prices kept buyers at bay, while dealers in India pinned their hopes on an upcoming festival season to bring in more customers.

Local gold futures were trading around 47,100 rupees per 10 grams on Friday, recovering from a four-month low of 45,662 rupees touched last month.

As a result, retail demand was quite weak across the country for the last few days as prices were going up, said a Mumbai-based bullion dealer with a private bank.

Dealers charged premiums of up to $2 an ounce over official domestic prices – inclusive of 10.75% import and 3% sales levies – unchanged from last week.

“Festival season is approaching. Jewellers could start purchases if prices remain stable for the next few days” said another Mumbai-based bullion dealer.

In China, premiums narrowed slightly to $1-$5 an ounce over global benchmark spot prices, compared with last week’s $3-$6 premiums.

“Demand in China remains moderate as customers wait for prices to come down,” said Peter Fung, head of dealing at Wing Fung Precious Metals.

In Hong Kong, premiums of $0.80-$1.80 were charged as rising COVID-19 cases and resultant lockdowns hurt jewellery demand.

In Singapore, premiums ranged from $1 to $1.50 per ounce, and according to Brian Lan, managing director at dealer GoldSilver Central, customers took advantage of higher prices to sell more gold.

In Japan, gold premiums stayed in a $0.25-$0.50 range, Tokyo-based traders said.

Courtesy: Economic Times