Sunday, June 26, 2022
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Asia Gold-India rates flip to premium, COVID curbs stifle China market, Retail News, ET Retail


Asia Gold-India rates flip to premium, COVID curbs stifle China marketThe physical gold market in India flipped to a premium this week as a price dip helped drive demand in the run up to the Akshaya Tritiya festival, while COVID-induced curbs muted activity in top consumer China.

Indian dealers charged premiums of up to $3 an ounce over official domestic prices – inclusive of 10.75% import and 3% sales taxes – versus last week’s $8 discounts.

“Retail buying significantly improved this week. Buyers were waiting for price correction, which happened just before the Akshaya Tritiya festival,” said Amit Modak, chief executive officer at jeweller PN Gadgil and Sons.

Buying gold is considered auspicious during the annual Hindu and Jain festival, celebrated earlier this week.

Local gold prices traded around 51,300 rupees per 10 grams on Friday, after hitting an over 1-month low of 50,481 rupees earlier this week.

Many retail consumers preferred to buy coins and bars for investment purpose during the festival, Modak said, adding the ongoing wedding season could help demand if prices hold at current levels.

The Chinese market continued to see discounts of about $10 per ounce versus global benchmark spot rates.

The lockdowns seem to be dampening demand in China “for the foreseeable future,” City Index’s senior market analyst Matt Simpson said, noting holidays also played a part.

In Hong Kong, gold changed hands between $0.80 an ounce and $2 discounts.

Gold could see some safe-haven demand once China comes out of lockdown, “especially when one looks at losses being made in real estate, etc.,” said Ross Norman, an independent analyst.

Singapore saw premiums of $1.30-$1.60 an ounce.

The holiday-shortened week in Singapore saw wholesalers covering their shorts, while some demand was seen on the retail side after gold broke over $1,900, said Brian Lan, managing director at dealer GoldSilver Central.

In Japan, gold was sold at $1 discounts.





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