BENGALURU / MUMBAI (Reuters) – Physical demand for gold improved in China’s main hub this week as buyers took advantage of large discounts, while activity remained subdued in other hubs in because of closings and vacations. Dealers in China were selling gold with an average rebate of around $ 30 an ounce from the benchmark spot prices, which is down from the $ 48 rebates last week.
FILE PHOTO: Gold bars are displayed at the GoldSilver Central office in Singapore on June 19, 2017. REUTERS / Edgar Su
“While overall demand for gold is still weak, (there has been) a big improvement over the past week,” said Samson Li, Hong Kong-based precious metals analyst at Refinitiv GFMS, noting that c ‘was partly because of the demand for safe haven, and also because of the attractive prices in China.
“I expect demand to continue to recover gradually. Now, with the sales of a few gold bars during the working week holidays, I expect the retail business to source from wholesalers. ”
Labor Day in China runs from May 1 to 5.
Global spot prices have risen more than 1% so far this week as investors hoped for more stimulus from the US central bank.
A few jewelry stores have opened in India, but demand was negligible due to higher prices and the fact that few people went to the stores.
On Friday, gold futures traded around 46,000 rupees for 10 grams, nearly a record high reached last month.
India’s gold imports fell 99.9% year-on-year in April to their lowest level in nearly three decades with the end of air travel.
Gold scrap stocks in India are expected to reach a record level in 2020, the World Gold Council said.
In Singapore, gold was sold at a premium of $ 1.25 to $ 1.65 an ounce. Demand has remained stable even though the restrictions imposed by coronaviruses have kept most stores closed, traders said.
“The major refineries have just been authorized to resume full activity this week … retail products (should be) available in 2-3 weeks,” said Brian Lan, of Singaporean dealer GoldSilver Central.
Meanwhile, in Hong Kong, gold was sold at a premium of around $ 0.53 to $ 1.25 an ounce relative to the benchmark.
“Some policies are loosening, people are going out but they’re not buying gold, they’re buying food,” said Ronald Leung, chief reseller, Lee Cheong Gold Dealers in Hong Kong.
In Japan, demand remained calm due to a public holiday. Gold bullion was sold at some level at par with the benchmark at a premium of $ 0.50 per ounce.
Report by Harshith Aranya and K. Sathya Narayanan in Bengaluru and Rajendra Jadhav in Mumbai. Editing by Jane Merriman