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Retail consumers in India continued to buy up physical gold this week as prices retreated to a near one-year low, while lower rates also injected fresh activity in other hubs, especially Singapore.
Dealers charged up to $5 an ounce over official domestic prices, inclusive of 12.5% import and 3% sales levies, compared with last week’s premium of $4.
“Demand has significantly improved in the past few days. Retail buyers are making purchases, especially for weddings,” said Mangesh Devi, a jeweller based in Satara in the western state of Maharashtra.
On Friday, local gold futures fell to 44,217 rupees per 10 grams, a trough since April 7.
Jewellers were also making healthy purchases in the first half of the week, but now a few of them have paused expecting further fall in prices, said a Mumbai-based dealer with a bullion importing bank.
“Jewellers don’t want to get stuck with high cost inventory,” the dealer said.
In Singapore, premiums of $1.60-$2 an ounce were charged, with strong demand arising from low local prices.
“We’ve seen an increase in demand, in particular from retail clients, for both gold and silver, as prices have come down a bit,” said Brian Lan, managing director at dealer GoldSilver Central, adding that wholesalers are also covering their short positions.
Chinese customers were charged premiums of about $6-$7 an ounce over benchmark spot gold prices, unchanged from last week as demand was stable, but not high, dealers said.
In Hong Kong, dealers sold bullion at anywhere between a discount of $3 and a premium of $2 relative to the benchmark. Japanese dealers charged a premium of $0.50.
A sharp dip in domestic rates has triggered relatively strong investment demand, a trader at Tokyo-based retailer Tokuriki Honten said.
“Individual investors are seeing current price level as a good buying opportunity,” the trader added.