* India premiums decrease to $ 2 / oz from official national tariffs
* Chinese discounts go down to $ 10-16 / oz
BENGALURU / MUMBAI, Nov. 20 (Reuters) – A festival-led buying spree continued in India’s retail gold market this week, although premiums eased slightly from the week last year and that sales volumes were considered lower year over year.
In the meantime, discounts from major consumer China have narrowed further, although demand has remained relatively subdued.
Indians celebrated the Diwali festival this week, after Dhanteras on November 13.
“Jewelry showrooms have seen an increase in traffic in recent days. The demand for retail jewelry has improved, ”said Ashok Jain, owner of Mumbai-based gold wholesaler Chenaji Narsinghji.
Dealers have charged premiums of around $ 2 an ounce over official domestic prices, including 12.5% imports and 3% sales taxes, down from $ 4 last week.
Although buyers were looking for gold, “aggregate demand is expected to decline further 10-30% year on year in terms of tonnage, although it may be stronger in terms of US dollars.” Standard Chartered said in a note.
Local gold futures were trading around 50,083 rupees per 10 grams on Friday, still at historically high levels, but more than 10% below the record high of 56,191 rupees reached in August.
The correction attracted many buyers who had been put off by the higher prices, said a Mumbai-based dealer with a private bullion import bank.
In Singapore, physical gold was sold at a premium of $ 1.40 per ounce to international spot prices.
While retail demand remains strong as prices consolidate, some investors are also benefiting from lower prices, said Vincent Tie, sales manager at Silver Bullion.
In China, discounts rose from $ 10 to $ 16 an ounce, from $ 18 to $ 26.55 a week ago, which dealers attributed to fluctuations in exchange rates.
Prices in China have remained below global spot rates for much of the year as the coronavirus pandemic stifles demand.
But demand is still moderate and “people don’t have a lot of money to invest in jewelry and other gold items,” said Peter Fung, sales manager at Wing Fung Precious Metals.
“If spot prices were to break above the $ 1,850 level, there would be some growth in demand.”
Gold was sold on par with benchmark spot rates in Japan.
Reporting by Diptendu Lahiri, Eileen Soreng in Bengaluru and Rajendra Jadhav in Mumbai; Edited by Arpan Varghese and