MUMBAI: Physical gold demand sagged across major Asian hubs as prices resurged this week, although there were expectations that the market may be starting to recover.
"We've seen inquiries coming in (and) expect retailers to see an uptick in activity and retail demand in the next two weeks," said Brian Lan, of Singapore dealer GoldSilver Central.
Premiums of $0.80 an ounce were being charged over the benchmark prices in Singapore, he added.
In top consumer China, discounts of $10 to $15 were being offered, compared with $5-$10 an ounce last week. Discounts have sharply come down from up to $70 an ounce quoted in April.
"Chinese gold demand appears to be rebounding after lockdown in line with the improved Shanghai discount. This suggests emerging market gold demand will shift from being a drag on gold prices to a tailwind as we move into 2H20," Goldman Sachs said in a note.
Premiums in Hong Kong were around $0.50-$1.50 an ounce.
"Demand for physical gold was quite high," said Joshua Rotbart, managing partner, J. Rotbart & Co in Hong Kong.
"While retail demand has been subdued, we see more and more individual investors and families looking to buy gold and other precious metals."
In India, demand remained subdued, with prices trading near record high amid unavailability of public transport in many parts of the country.
"Most jewellery stores have opened, but still retail demand is not picking up. Consumers are struggling to digest the price rise," said a Mumbai-based dealer with a private bullion importing bank.
Dealers were offering a discount of up to $13 an ounce over official domestic prices this week, down from the last week's $20. The domestic price includes a 12.5% import tax and 3% sales tax.
Retail demand is unlikely to improve until public transport services such as suburban rail service in Mumbai becomes fully operational, said a dealer based at Chennai.
In Japan, gold was sold anywhere between at par with the benchmark to a $0.50 premium.
Comments
Comments are closed for this article.