‘Buying was nearly halted for a few days after the duty hike. But as global prices corrected, demand started to improve’
‘Buying was nearly halted for a few days after the duty hike. But as global prices corrected, demand started to improve’
Physical gold demand improved slightly in India and discounts narrowed this week after prices eased, while concerns over fresh coronavirus outbreaks kept a leash on activity in China.
“Buying was nearly halted for a few days after the duty hike. But as global prices corrected, demand started to improve,” said a Mumbai-based dealer with a private bullion importing bank.
Local gold prices were trading at about ₹50,700 per 10 gm on Friday after rising to ₹52,300 on Monday.
This week, dealers were offering a discount of up to $28 an ounce over official domestic prices — inclusive of the 15% import and 3% sales levies — down from last week’s discount of $40.
Some buyers were postponing purchases as they were confused by volatile global prices and fluctuations in the Indian rupee, which hit a record low this week, said a New-Delhi based bullion dealer.
Meanwhile, jitters over sporadic COVID-19 flare-ups weighed on sentiment in top consumer China with gold changing hands at $3-$5 an ounce premiums over the global benchmark spot prices.
“Many fear there will be more lockdowns in scattered regions, and are sitting on the sidelines, even though China plans to increase stimulus spending to boost the economy,” said Bernard Sin, regional director, Greater China at MKS PAMP.
“Investors are expecting to see lower gold in RMB prices,” Mr. Sin added.
In Hong Kong, gold was sold at premiums of $0.80-$1.70 an ounce and in Singapore, dealers charged premiums of $1.30-$1.60 an ounce.
“Gold and silver demand has increased even with prices under $1,800 and $20 respectively… It’s usually the astute investors who begin buying when prices are low,” said Vincent Tie, sales manager at Singapore dealer Silver Bullion.
In Japan, gold was sold between a premium of $0.50 and at par with the benchmark.
