India gold demand slows as prices rebound; China emerges from holiday lull
Gold demand in India was sluggish this week as prices rebounded, while trading in top consumer China was subdued during the holiday-truncated trading period.
In India, domestic gold prices were trading around 150 900 rupees ($1 561.87) per 10 grams on Friday, after falling to 145 538 rupees last week, the lowest level in nearly two months.
“Consumers are highly price-sensitive. The moment prices rise, they hit the pause button and wait for a correction,” said an Ahmedabad-based jeweller.
Dealers quoted a discount of up to $6 an ounce over official domestic prices this week, inclusive of 15% import and 3% sales levies, compared to last week’s discount of up to $14.
“Gold discounts have narrowed as imports have declined. If investment demand picks up during the festive season, as it did last year, the market could shift to a premium,” said a Mumbai-based dealer with a private bank.
Indians will celebrate the Dussehra festival in October, and Diwali in early November, when buying gold is considered auspicious.
In China, bullion traded at a premium of $10 an ounce to the global benchmark price. The Chinese markets reopened after the Golden Week holiday on Thursday.
“Activity remains relatively subdued, as many market participants are still in holiday mode. Nevertheless, the positive premium points to underlying physical buying interest as trading resumes,” said Bernard Sin, regional director, Greater China at MKS PAMP.
International spot gold prices rose more than 1%, rebounding from a two-month low touched earlier in the week.
In Singapore, gold was sold between a premium of 50 cents and $1.50 this week, while in Hong Kong it traded flat-to-$1 premium.
In Japan, gold was sold between a 50-cent discount and a 50-cent premium.
Profit sellers are leading the way this week, a Tokyo-based trader said.