MUMBAI: Gold demand in India eased on Friday after a modest pick-up earlier in the week, as prices rebounded from a three-month low, while buying interest in China improved slightly.
India gold prices rose to as much as 148,046 rupees per 10 grams (USD1,553) after having touched 140,450 rupees, the lowest level since March 27, on Tuesday. Prices fell about 8.4percent in June, the first monthly drop since March, tracking volatility in international gold prices.
“Many buyers were waiting for a price correction. Once prices corrected, they began making small purchases at the beginning of the week,” said a Kolkata-based jeweller.
Dealers quoted a premium of up to USD5 an ounce and a discount of USD7 over official domestic prices this week, inclusive of 15percent import and 3percent sales levies, compared to last week’s premium of up to USD6.
“Jewellers were purchasing, but volatile prices made them cautious. The lean demand season has now started, as there are no major festivals soon,” said a Mumbai-based bullion dealer with a private bank.
International spot gold was headed for its first weekly gain in five and traded above the USD4,100 level, as weak US payrolls data eased Federal Reserve interest rate hike expectations. In China, the bullion traded at par to discounts of USD2 an ounce to the global benchmark spot price, compared to last week’s discount of USD3 to USD7.
“USD4,000 looks like a very good support at this moment, and I think the market will stay here for quite a while. However, there is still a lot of uncertainty, which is why people are hesitating to buy too much at this moment,” said Peter Fung, head of dealing at Wing Fung Precious Metals.
“If prices fall back below USD4,000, we could see some further buying interest on the dip.” In Hong Kong, gold traded between a USD0.50 discount and a USD1.70 premium, while in Japan, it was sold at a discount of USD0.50. In Singapore, gold was sold between a USD1 discount and a USD1.60 premium.
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