BENGALURU: Gold traded at a premium in India this week for the first time in two months, as softer prices boosted demand for the metal, while premiums in China ticked down slightly as buyers awaited a deeper correction.
Dealers quoted discounts of up to USD8 an ounce and premiums of USD2 an ounce over official domestic prices this week, inclusive of 6 percent import and 3 percent sales levies, compared with discounts of up to USD61 last week.
“Falling prices are helping bring back buyers. Retail buying and jewellers’ purchases were stronger this week than last week,” said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji.
Domestic gold prices were trading around 146,700 rupees per 10 grams on Thursday, after rising to 151,326 rupees earlier this week and a record high of 180,779 rupees in late January.
Scrap supplies have declined in recent weeks, prompting jewellers to buy from banks, although volatile prices and the rupee are keeping purchases small, said a Mumbai-based bullion dealer with a private bank.
In top consumer China, bullion traded at premiums of USD12-USD17 an ounce over the global benchmark price this week, slightly down from USD14-USD18 last week.
“The demand for physical gold is steady as gold swings between USD4,400 and USD4,700….when the market goes down to about USD4,200, we could see some increase in demand,” said Peter Fung, head of dealing at Wing Fung Precious Metals.
International spot gold prices dropped over 4 percent on Thursday, retreating from a two-week high hit earlier in the session, as the Middle East war rages on, fuelling concerns around inflation and a hawkish monetary policy response.
“Gold jewellery sales remained soft in the immediate post-Chinese New Year period, but have begun a moderate recovery, supported by low inventory levels and restocking demand following the price correction,” Metals Focus said in a note.
Investment flows cooled down in the last two months of March after a solid start in the first two months of the year, it added.
In Hong Kong, physical gold traded at par to premiums of USD1.80, while in Japan, gold was sold at par with spot prices.
In Singapore, gold was sold at prices ranging from a USD0.25 discount to a USD1.80 premium per ounce.
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