Demand for physical gold in India remained subdued this week despite a correction in prices, as buyers held out for a bigger drop, while demand improved in China and Singapore.
This week, Indian dealers were offering a discount of up to $18 an ounce over official domestic prices, inclusive of 6% import and 3% sales levies, down from last week’s discount of up to $27.
“Retail buyers are still on the sidelines despite the correction in prices. This is traditionally a lean demand season and buyers are waiting for a bigger drop in prices,” said a Kolkata-based jeweller.
Domestic gold prices were trading around 96,100 rupees per 10 grams on Friday after hitting an all-time high of 101,078 rupees earlier this month.
Jewellers weren’t buying much new gold from banks because retail buyers were trading in their old jewellery for new ones, which met a good part of the demand, said a Mumbai-based bullion dealer with a private bank.
Spot gold was trading around $3,294.19 as of 0425 GMT, down from levels near $3,450 last week.
Gold heads for second weekly loss, investors eye US inflation data
Dealers in top gold consumer China charged premiums of $12-$14 an ounce over the global benchmark spot price, higher than last week’s $10 premium.
“People are still interested in buying some gold as a safe haven,” Peter Fung, head of dealing at Wing Fung Precious Metals said, adding that a dip below $3,300 could attract more interest as investors seem ready to buy on any weakness.
In Hong Kong, gold was sold at par to a $2.00 premium, while in Singapore, gold traded between at-par price and a $2.20 premium.
“We’ve seen a bit more retail buying… wholesalers are also short-covering because the prices came down quite a bit from last week,” said Brian Lan, managing director at GoldSilver Central.
In Japan, bullion was sold flat to a $0.5 premium.
American Dollar Exchange Rate