Asia Gold: India discounts steepen; Asian consumers take advantage of price rally

BENGALURU: Indian dealers offered the highest discounts in nearly 17 months this week as buyers postponed physical gold purchases after a sharp price rally, with most Asian consumers opting for selling jewellery to cash in profits.

“Demand has dried up because of price rise. Buyers are waiting for price correction,” said Harshad Ajmera, a gold wholesaler in Kolkata in the eastern state of West Bengal.

Local gold prices jumped to 52,797 rupees per 10 grams on Thursday, the highest level since August 2020.

This week, dealers were offering a discount of up to $18 an ounce on official domestic prices - inclusive of the 10.75% import and 3% sales levies, up from the last week’s discount of $5.5.

Scrap gold supplies improved this week as the price rise prompted some Indian consumers to sell their jewellery, said a Mumbai-based bullion dealer.

China saw premiums around $2-$5 an ounce over benchmark spot gold rates, while Hong Kong dealers charged around $1-$2.50 premiums as the region witnessed physical gold liquidation and profit taking.

China’s net gold imports through Hong Kong dropped by 5.6% to their lowest level in five months in January, official data showed.

Premiums ranged between $1.60-$2 per ounce in Singapore.

Vincent Tie, sales manager at dealer Silver Bullion said that more European clients, concerned with how the Ukraine crisis will play out, are enquiring about storing precious metals and diversifying wealth in Singapore.

Additionally, individuals and wholesale dealers were selling jewellery to take profit, Brian Lan, managing director at dealer GoldSilver Central said.

In Japan, gold was sold at a discount of $1 to a premium of $0.50 as gold priced in yen hit all-time highs.

Most investors were looking to make profit at the moment, however not much selling has been seen so far with customers looking for another rally, said Tokyo-based trader Tokuriki Honten.