Indian dealers offered discounts on physical gold purchases for a third straight week as higher domestic prices depressed jewellery demand in most Asian centres and prompted selling to take advantage of elevated rates.
“Demand is very weak due to higher prices and the monsoon season,” said Ashok Jain, owner of Mumbai-based gold wholesaler Chenaji Narsingji, adding that buyers were waiting for a price correction.
Local gold prices in India were at their highest since June 20 this week, tracking gains in global benchmark rates..
Indian dealers offered a discount of up to $6 an ounce over official domestic prices — inclusive of the 15% import and 3% sales levies, from last week’s discount of $7.
Demand is expected to remain weak for the next few weeks with no major festivals in the near future to boost demand, a Mumbai-based bullion dealer with a private bank said.
Earlier in the week, India also restricted imports on plain gold jewellery as it tried to plug loopholes in its trade policy.
In top consumer China, premiums ranged between $10 and $14 this week, said Bernard Sin, regional director, Greater China at MKS PAMP, highlighting that the sentiment surrounding physical demand for gold was weak.
Peter Fung, head of dealing at Wing Fung Precious Metals said that the interest from small retail investors was offset by profit-taking since prices were rising.
In Hong Kong, gold was sold at $0.50-$2.50 premiums, while Singapore dealers charged $1.50-$3 premiums.
Since the easing of pandemic restrictions, people have spent funds they used to buy assets such as gold on travelling, Brian Lan of Singapore dealer GoldSilver Central said.
In Japan, gold was sold at between par with global price levels and a $0.50 premium, with increased interest seen in gold bars compared with jewellery, a trader said.
Source: Brecorder
