Physical gold demand stalled in India this week as monsoon rains and a spike in domestic prices kept buyers at bay, while bullion was sold at high premiums in top consumer China.
Indian dealers were offering a discount of up to $6 an ounce over official domestic prices — inclusive of the 15% import and 3% sales levies, unchanged from the last week.
Heavy rainfall disrupted normal life in Gujarat and Maharashtra, two key consuming states, said a Mumbai-based bullion dealer with a private bank.
“Retail demand in many states is being affected by heavy rainfall. People don’t want to step out of their houses,” he said.
The rebound in local prices has also been discouraging buyers from making purchases, said a Chennai-based bullion dealer.
Local gold prices jumped to 59,984 rupees per 10 grams earlier this week, their highest since June 9.
Asia Gold: India at discount as high prices dent retail demand
In China, gold changed hands at premiums of anywhere between $9 and $17 an ounce to global prices, compared with premiums of $10 and $14 charged last week.
“Demand is moderate considering economic downturn in most sectors,” said Bernard Sin, regional director, Greater China at MKS PAMP.
“We don’t see panic safe havens buying or investors shifting into gold. We also don’t see sellers flooding the market. Also, no new gold import quota has been issued.”
In Hong Kong, gold was sold at $0.50-$2.25 premiums, while Singapore dealers charged $1.50-$2.50 premiums.
The gold market has been a bit quiet, said Brian Lan of Singapore dealer GoldSilver Central, adding that retail investors are worried that prices will continue to shoot up and some of them are already waiting for such price levels to sell.
In Japan, gold was sold at a discount of $0.25 to global prices, with people taking advantage of a stronger local currency to sell and book profits, a trader said.
Source: Brecorder
