Asia Gold-Wedding bells, price dip ring in demand in India
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A dip in domestic prices in India gave a fillip to demand for physical gold this week as the wedding season picked up pace, while some consumers snapped up bargains in China.
“Wedding season demand is improving because of the price correction. Jewelry stores are witnessing good footfall,” said a Mumbai-based dealer with a bullion importing bank.
Local gold prices fell to a near 3-month low of 49,970 rupees on Friday.
“Retail buyers and jewelers were waiting for the correction for the last few weeks,” said a New-Delhi based bullion dealer.
The improved demand allowed dealers to charge the highest premiums in over a year, at $5.5 an ounce over official domestic prices — inclusive of 10.75% import and 3% sales levies– versus $3 last week.
In China, discounts narrowed to $6-$8 per ounce over global benchmark spot rates from $10 last week, even as major regions remain in lockdown due to COVID-19.
There was some fresh physical buying interest on price dips, said Peter Fung, head of dealing, Wing Fung Precious Metals.
Shanghai officials recently said half the city had achieved “zero COVID” status, but restrictions would remain.
However, “based on what we’ve seen previously, when the market reopened after COVID measures, the China side has been aggressive in terms of ‘revenge buying’,” noted Brian Lan, managing director at Singapore dealer GoldSilver Central.
A price retreat also triggered some buying from both retail and wholesale customers in Singapore, Lan added.
In Hong Kong, gold was sold anywhere between on par with the benchmark to a $2 discount, while Singapore saw $1.30-$1.80 an ounce premiums.
But, lower prices also dissuaded some investors, said Vincent Tie, sales manager at another Singapore dealer, Silver Bullion.
In Japan, gold changed hands between a $0.5 premium to on par with global rates, Tokyo-based traders said, adding there was buying on the dips. (Reporting by Bharat Govind Gautam, Ashitha Shivaprasad and Eileen Soreng in Bengaluru, Rajendra Jhadav in Mumbai; editing by Arpan Varghese and Kirsten Donovan)
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