Domestic gold futures prices fell to Rs 47,253 earlier this week, a two-week low.
Physical gold demand picked up in major Asian hubs this week on the back of falling prices, with dealers in India bracing for a likely spike in purchases as wedding season approaches.
With the price correction in the first half of the week, “jewelers have been buying at lower levels as they are seeing good retail demand for weddings,” said a Mumbai-based gold dealer with a private bank said.
Domestic gold futures prices fell to Rs 47,253 earlier this week, a two-week low. Dealers have slashed prices by up to $1/ounce from the official domestic price – including 10.75% import tax and 3% sales tax – compared to last week’s $2 discount.
Gold is traditionally an integral part of weddings in India, the world’s second-largest consumer of gold bars after China.
Lower prices also caused China and Japan to increase slightly. Chinese customers are charged $4 to $5 an ounce premium against the benchmark spot price, compared with $1 to $4 last week.
The country’s monthly net gold imports through Hong Kong jumped 56% in October to the highest level since June 2018.
Peter Fung, head of trading at Wing Fung Precious Metals, said Chinese demand will remain good as Christmas approaches, plus a drop in global rates below $1,800 an ounce has fueled a trend. Purchase.
Spot prices hit a multi-week low of $1,777.80 on November 24, although concerns about a new coronavirus variant fueled Friday’s rally.
“Demand has also recovered a bit in Hong Kong, we could see more interest in jewelry,” added Fung.
A $1 per ounce premium was charged in Hong Kong. Meanwhile, the Singapore gold market has been sluggish this week as soft asset markets and equities sold off sharply, said David Mitchell, managing director of Indigo Precious Metals.
