Nov 26 (Reuters) – Physical gold demand picked up in major Asian hubs this week helped by a retreat in prices, with dealers in India prepared for a likely spurt in buying as the wedding season gathers pace.
With a correction in prices during the first half of the week, “jewellers have been making purchases at lower levels as they are witnessing healthy retail demand for weddings,” said a Mumbai-based bullion dealer with a private bank.
Local gold futures fell to 47,253 rupees earlier this week, the lowest in a fortnight.
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Dealers offered discounts of up to $1 an ounce over official domestic prices — inclusive of 10.75% import and 3% sales levies — versus last week’s $2 discounts.
Gold has traditionally been an integral part of weddings in India, the world’s second biggest bullion consumer after China.
Lower prices drove a slight pick up in China and Japan as well.
Chinese customers were charged premiums of $4-$5 an ounce over benchmark spot prices , versus last week’s $1-$4.
The country’s monthly net gold imports via Hong Kong jumped 56% in October to the highest since June 2018. read more
Peter Fung, head of dealing at Wing Fung Precious Metals, said Chinese demand should remain healthy as Christmas approaches, adding a dip in global rates below $1,800 an ounce prompted a pick in purchases.
Benchmark spot prices hit a multi-week low of $1,777.80 on Nov. 24, although concerns over a new coronavirus variant drove a rebound on Friday.
“Demand has recovered a bit in Hong Kong as well, we can see more interest in jewellery,” Fung added.
Premiums of $1 per ounce were charged in Hong Kong.
Meanwhile, the Singapore gold market has been very sluggish this week tracking a soft assets markets and the sharp selloff in equities, said David Mitchell, managing director at Indigo Precious Metals.
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Reporting by Rajendra Jadhav in Mumbai, Nakul Iyer, Arundhati Sarkar and Asha Sistla in Bengaluru; Editing by Shailesh Kuber, Kirsten Donovan
Our Standards: The Thomson Reuters Trust Principles.
