Gold activity in Asia picks up in most hubs, volatility undermines Indian demand

  • China bounties between $ 7 and $ 10 an ounce, India goes on a discount
  • Wholesalers, companies buying more in Singapore-dealership
  • Retail demand should pick up at the end of the year

December 10 (Reuters) – Major Asian hubs saw strong demand for physical gold this week as domestic prices retreated late in the year, although rate volatility deterred retail buyers and jewelers in India.

The markets of China, Japan and Singapore were inspired by a decline in global benchmark spot gold prices.

In Singapore, premiums fell from $ 1.40 to $ 1.80 an ounce against spot rates – about $ 1,779 an ounce on Friday – from $ 1.30 to $ 1.60 last week.

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Brian Lan, managing director of reseller GoldSilver Central, said retail consumers are buying gold, but most purchases are from wholesalers and companies who are using current prices to source.

Retail purchases could increase until the end of the year as people receive their bonus pay, he added.

Customers of major Chinese consumers have been billed premiums of $ 7-10 an ounce compared to $ 6-9 last week.

Hong Kong’s premiums went from $ 0.50 to $ 1 to $ 0.80 to $ 1.80 previously.

Dick Poon, managing director of Heraeus Metals Hong Kong Ltd, said premiums could rise in part due to a reduced influx of scrap as refiners prepare for the annual inventory count.

In Japan, gold was sold between at par with the benchmark at $ 0.50 in premiums.

A Tokyo-based dealer said some retail investors may buy gold to protect themselves from concerns about the Omicron variant of the coronavirus.

The Indian market suffered a discount of around $ 2 an ounce from official domestic prices – including 10.75% import taxes and 3% sales taxes – from last week’s $ 2 premiums .

“Retail demand has dropped significantly in recent days, prompting jewelers to cut back on their bullion purchases,” said Harshad Ajmera, owner of Kolkata-based wholesaler JJ Gold House.

Local gold futures were trading around Rs 47,880 per 10 grams on Friday, after hitting a two-month low of Rs 46,388 last week.

The volatility has prompted jewelers to delay their purchases for the upcoming wedding season, said a Mumbai-based bullion dealer with a private bank.

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Reporting by Rajendra Jadhav in Mumbai and Asha Sistla in Bengaluru; edited by Arpan Varghese and Barbara Lewis

Our Standards: Thomson Reuters Trust Principles.

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