Asia Gold-China flips to premium after 11 months as New Year beckons

SouthGobi Resources

15/01/2021 13:42

* Singapore premiums widen to $0.80-$1.80/oz 
    * Indian premiums ease amid subdued demand

    By Rajendra Jadhav and Diptendu Lahiri
    BENGALURU/MUMBAI, Jan 15 (Reuters) - Physical gold in top
consumer China was sold at a small premium for the first time
since early 2020, as demand picked up ahead of the Chinese new
year.
    Dealers in China offered premiums of $0.50-$4 an ounce over
benchmark spot gold prices, compared with last week's $7-$10
discounts.
   "There's been an uptick, mostly due to higher demand ahead of
Chinese new year and some economic recovery," said Ronald Leung,
chief dealer for Lee Cheong Gold Dealers in Hong Kong, adding
demand could rise further on COVID-19 vaccine rollouts.
    Chinese dealers were forced to offer steep discounts for
most of last year, as the pandemic hammered the economy and
retail demand. 
    
    A stronger yuan and lower spot gold prices also helped, said
Peter Fung, head of dealing at Wing Fung Precious Metals.
    Global benchmark spot gold prices  XAU=  slumped 2.6% last
week.  GOL/ 
    In India, dealers charged premiums of up to $0.50 an ounce
over official domestic prices, inclusive of 12.5% import and 3%
sales levies, down from last week's premium of $1.50. 
    "Demand is a little subdued due to price fluctuations.
Consumers are on the sidelines and waiting for a clear trend,"
said Ashish Pethe, partner at Waman Hari Pethe Jewellers. 
    On Friday, local gold futures  MAUc1  traded around 49,200
rupees per 10 grams, having hit a one-month low of 48,635 rupees
earlier this week.
    Jewellers could ramp up purchases for the wedding season
from next week, said a Mumbai-based bullion dealer with a gold
importing bank.  
    Buying also picked up in Singapore due to lower spot prices,
with premiums of $0.80-$1.80 charged versus $0.80-$1.30 an ounce
last week.
    The pick-up in demand was "encouraging", said Vincent Tie,
sales manager at Silver Bullion.
    Hong Kong gold was sold between a discount of $2 to a
premium of about $1.50, while in Japan, gold was sold at
anywhere between on par with the benchmark to a $1 premium.

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Physical gold in China     https://tmsnrt.rs/3nNMvlM
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 (Reporting by Diptendu Lahiri in Bengaluru and Rajendra Jadhav
in Mumbai, additional reporting by Shreyansi Singh; Editing by
Arpan Varghese and Edmund Blair)
 ((Diptendu.Lahiri@thomsonreuters.com; within U.S. +1 651 848
5832; outside U.S. +91 80 6749 3683;; Reuters Messaging:
diptendu.lahiri.thomsonreuters.com@reuters.net))