Asia Gold-Demand mixed as consumers sell expensive gold for profit, buy silver

PC Jeweller

30/08/2019 14:32

* Discount in India falls to $24 vs $31 last week
    * China gold premiums little changed at $9-$10 
    * India's gold market: http://tmsnrt.rs/2b1Tl6J

    By Brijesh Patel and Rajendra Jadhav
    BENGALURU/MUMBAI, Aug 30 (Reuters) - Most consumers in top
Asian hubs sold their physical gold holdings this week to cash
in on high prices with many opting for cheaper silver, while the
Indian bullion market hoped for an uptick in demand from an
upcoming festival.
    Global benchmark spot gold prices  XAU=  were on course for
a fourth straight monthly rise on uncertainties surrounding
U.S.-China trade and the global economy.  GOL/ 
    Silver, meanwhile, rose above $18 an ounce for the first
time in nearly two years.
    "Prices are climbing and we're seeing more selling," said
Brian Lan, managing director at Singapore dealer GoldSilver
Central.
    "We've seen strong buying in silver because it's done very
well. Clients are selling gold and buying silver."
  
 
    In top gold consumer China, bullion was sold at a premium of
$9-$10 an ounce over the benchmark, versus $8-$10 last week.
    "There's not too much activity in China. Higher prices have
dampened jewelry demand," said Ronald Leung, chief dealer at Lee
Cheong Gold Dealers in Hong Kong.
    In India, demand remained tepid, despite a mild price
correction earlier this week.
    "Retail buying is not picking up due to higher prices.
Consumers are waiting for a bigger fall," said Ashok Jain,
proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji. 
    Gold futures fell to a one-week low of 38,611 rupees per 10
grams on Friday, having hit an all-time peak of 39,425 rupees on
Thursday.
    Dealers offered discounts of up to $24 an ounce over
official domestic prices this week, down from last
week's $31 discounts. The domestic price includes a 12.5% import
tax and 3% sales tax.
    "Discounts could fall further next week. Demand is expected
to improve in some pockets" due to the Ganesh Chathurthi
religious festival next week, said a Mumbai-based dealer at a
private bullion-importing bank.
    Gold is considered an intrinsic part of weddings and
festivals in India.
    In Singapore, premiums were at $0.60-$0.80 an ounce against
$0.50-$0.80 last week, while Hong Kong premiums were quoted at
$0.60-$1.10 versus $0.50-$1.20 previously.  
    "Demand for both selling gold and crystallising profits, and
for getting more exposure to physical gold is on the rise, both
in Singapore and Hong Kong," said Joshua Rotbart, managing
partner at J. Rotbart & Co in Hong Kong.  
    Activity in Hong Kong has been muted by high prices and
months of political unrest.  urn:newsml:reuters.com:*:nL4N25J1DX
    "The protests definitely increase the appetite in Hong Kong
for physical gold as a protection against what is about to come.
However, we see more clients holding their gold in their houses
or office, or opting for storage in Singapore," Rotbart added.
    In Japan, gold was sold at par against the benchmark, a
Tokyo-based trader said.

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Gold and silver spot price performance in 2019 png    https://tmsnrt.rs/2NAIwe3
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 (Reporting by Brijesh Patel and K. Sathya Narayanan in
Bengaluru and Rajendra Jadhav in Mumbai; Editing by Arpan
Varghese and Dale Hudson)
 ((Brijesh.Patel1@thomsonreuters.com; Within U.S. +1 651 848
5832, Outside U.S. +91 8067493865; Reuters Messaging:
Brijesh.Patel1.thomsonreuters.com@reuters.net))