Asia Gold-Chinese buying fizzles as restrictions dull New Year glitter

SouthGobi Resources

29/01/2021 14:03

* Gold 'uninteresting' to Chinese investors - analyst
    * India's gold consumption likely to rebound this year - WGC
    * Singapore premiums at $1.2-$1.8/oz 

    By Nakul Iyer and Rajendra Jadhav
    Jan 29 (Reuters) - Physical gold demand eased in top
consumer China this week as coronavirus-led restrictions
dampened retail buying ahead of the Chinese New Year.    
    Dealers sold gold at anywhere between a discount of $4 and a
premium of $4 an ounce over benchmark spot gold prices, versus
$0.50-$4 premiums last week.  GOL/ 
    "Gold is uninteresting to Chinese investors in the current
climate given its weaker returns recently.  Gold premiums will
neither collapse nor skyrocket," said Bernard Sin, regional
director for Greater China at MKS Switzerland.
    China has imposed lockdowns and discouraged travel ahead of
its Lunar New Year in early February.  urn:newsml:reuters.com:*:nL4N2K31HN 
    "The Chinese new year is not helping demand this time," said
Ronald Leung, chief dealer for Lee Cheong Gold Dealers in Hong
Kong.
    An initial pick-up in buying in view of the key holiday had
pushed Chinese prices into a premium for the first time in 11
months in the week to Jan. 15.  urn:newsml:reuters.com:*:nL4N2JQ2KY
    In Hong Kong, gold dealers operated between a discount of $3
an ounce and a $1.50 premium. 
    Singapore premiums were around $1.2-$1.8. 
    "We're seeing a lot more festive buying. Many companies are
also giving small gold gifts to employees," said Brian Lan,
managing director at dealer GoldSilver Central in Singapore.
     Interest in silver had also shot up alongside a spike in
global prices  XAG= , he added.  
    India saw modest gold demand, with retail buyers encouraged
by a dip in domestic rates to their lowest in over a month
earlier this week.  MAUc1  
    "People were making small jewellery purchases for weddings
and even coins for the investment purpose," said Ashok Jain,
proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji.
    Premiums rose to about $2.5 an ounce over official domestic
prices, inclusive of 12.5% import and 3% sales levies, from $1
last week.
    Jewellers were not active as many were waiting for policy
decisions in the upcoming budget, due on Feb. 1, said a
Mumbai-based dealer with a bullion importing bank.
    The country's gold consumption is expected to rebound in
2021, the World Gold Council said.  urn:newsml:reuters.com:*:nL1N2K308M

 (Reporting by Diptendu Lahiri in Bengaluru and Rajendra Jadhav
in Mumbai; Editing by Arpan Varghese and Jan Harvey)
 ((nakul.iyer@thomsonreuters.com;  Within U.S. +1 646 223 8780,
Outside U.S. +91 80 6749 0417; Reuters Messaging:
nakul.iyer.thomsonreuters.com@reuters.net))