Asia Gold-India demand ticks up ahead of festivals, subdued elsewhere

PC Jeweller

06/09/2019 13:49

* Indian dealers offer highest discounts in over 3 years
    * China gold premiums at $9-$10/oz
    * Silver demand continues to be strong -traders
    * India's gold market: http://tmsnrt.rs/2b1Tl6J

    By Rajendra Jadhav and Eileen Soreng
    BENGALURU/MUMBAI, Sept 6 (Reuters) - Demand for physical
bullion was subdued in major Asian hubs this week as high prices
dampened consumer interest, although some hefty discounts on
offer in India led to a slight uptick in buying ahead of a major
festival season.
     Gold futures in India, the biggest bullion consumer after
China, were trading around 38,504 rupees per 10 grams on Friday,
easing from a record high 39,885 rupees touched on Wednesday. 
    "Demand has been slowly improving," said Daman Prakash
Rathod, a director at MNC Bullion, a wholesaler in Chennai.
    "But we need a bigger fall for normal demand during the
festive season."
    However, dealers offered discounts of up to $45 an ounce
over official domestic prices this week, the biggest since
August 2016, as jewellers held off on fresh purchases.
    Last week, discounts of up to $24 were offered. The domestic
price includes a 12.5% import tax and 3% sales tax.
    "Jewellers are not making purchases anticipating a bigger
fall," said a Mumbai-based dealer at a private bullion-importing
bank.
    Jewellers are running business with thin inventories and
have to build stocks for the festive season, the dealer said.
    Demand in India usually strengthens in the final quarter of
the year due to the wedding season as well as festivals such as
Diwali and Dussehra, when buying gold is considered auspicious.
    India's August gold imports plunged 73% from a year ago due
to a price rally and a hike in import duty, a
government source said on Wednesday.  urn:newsml:reuters.com:*:nL3N25V15O
    Global benchmark spot gold prices  XAU=  were set to mark a
weekly decline, but still held above $1,500, having hit $1,557
earlier in the week, the most expensive since April 2013.
    In top gold buyer China, bullion was sold at a premium of
$9-$10 an ounce over the benchmark, unchanged from last week.
    While buying did pick up slightly, it's mostly coming from
the investment side while jewellery demand is weak, said Samson
Li, a Hong Kong-based precious metals analyst with Refinitiv
GFMS.
    Hong Kong premiums were little changed at $0.50-$1.15 from
last week's $0.60-$1.10 range. 
    Though signs of easing political tensions in Hong Kong
boosted sentiment in wider markets, impacts are yet to be seen
in terms of activity in the bullion market, traders said. 
    In Singapore, premiums were quoted in the $0.50-$0.60 an
ounce range versus last week's $0.60-$0.80. 
    "We've seen substantially more interest in silver versus
gold this week," said Vincent Tie, sales manager at Silver
Bullion.
    Global spot silver  XAG=  prices have risen about 27% since
the end of May. 
    In Japan, gold was sold at an about $0.75 discount, a
Tokyo-based trader said.
    Japanese retail gold prices, meanwhile, hit their highest
since 1980.  urn:newsml:reuters.com:*:nL3N25W109

 (Reporting by Eileen Soreng in Bengaluru and Rajendra Jadhav in
Mumbai; editing by Arpan Varghese and Susan Fenton)
 ((eileen.soreng@thomsonreuters.com ; Within U.S. +1 646 223
8780, Outside U.S. +91 80 6749 6131; Reuters Messaging:
eileen.soreng.thomsonreuters.com@reuters.net))