Demand for physical gold has increased this week in leading hubs in India and China, although dealers were still forced to offer discounts, while business in India has returned to life as some of the COVID-19 restrictions have been eased.
Some states in India have begun to loosen restrictions as the number of infections declined. read more
“Gradually, businesses are opening in several states. As the number of new coronavirus cases declines, most states expect restrictions to ease in the next few weeks, ”said Mukesh Kothari, director of RiddiSiddhi Bullions, a bullion dealer in Mumbai.
Dealers offered discounts of up to $ 12 an ounce over official domestic prices, including 10.75% import and 3% sales tax. This is unchanged from last week, with no discount level seen since mid-September 2020.
“The jewelers were skeptical. They don’t know how quickly demand will recover. That is why they are not showing interest in buying at a higher level, ”said another bullion trader from Mumbai with a gold importing bank.
On Friday, local gold futures traded at around Rs 49,200 per 10 grams.
India’s gold imports in May rose more than ninefold from a 2020 low to 12 tonnes.
Discounts for China’s largest consumers have dropped to $ 7-12 an ounce from global benchmark gold spot rates from $ 20-50 last week amid stricter COVID-19 restrictions.
“We believe that demand will continue, although supply will decline, China will trade at a premium level again,” said Bernard Sin, MKS Regional Director for Greater China.
Premiums of $ 0.50–1 per ounce were charged in Hong Kong, while premiums in Singapore remained at $ 1.20–1.50 amid weak demand.
“We are seeing a decline in demand from the retail side and even from the wholesale side,” said Brian Lan, managing director of Singapore-based dealer GoldSilver Central, adding that the partial isolation has led to a decline in store traffic.
Dealers were hoping for a recovery as the restrictions will be lifted from next week. read more
Japanese dealers were selling gold at a $ 0.30 discount versus a $ 0.50 premium. The rise in prices muted activity.
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