Asia Gold-Demand slows in top hubs as holiday mood dulls activity

SouthGobi Resources

31/12/2020 13:23

* India switches to premium of $2.5/oz vs last week's $2
discount
    * China discounts unchanged at $15-$20/oz
    * Dealers concerned about new coronavirus variant
    * Spot gold prices set for 1% gain this week

    By Sumita Layek and Rajendra Jadhav
    BENGALURU/MUMBAI, Dec 31 (Reuters) - Physical gold demand
remained largely muted across top Asian hubs this week as
holidays kept buyers at bay, although prices in India flipped to
a premium due to constrained shipments.
    "Retail demand is negligible as people are in vacation
mood," said a Mumbai-based dealer with a bullion importing bank.
    Indian dealers were charging a premium of up to $2.5 an
ounce this week over official domestic prices, inclusive of
12.5% import and 3% sales levies, up from last week's discount
of $2.
    Gold imports have nearly stopped in the last few days as
most overseas banks are closed for vacation, allowing local
dealers to charge a premium despite weak demand, said a
Chennai-based bullion dealer.
    Local gold futures  MAUc1  were trading around 50,200 rupees
per 10 grams on Thursday.
    Spot gold prices  XAU=  were on track for a 1% gain this
week.  GOL/ 
    In China, discounts were unchanged from previous week at
$15-$20 an ounce as demand remained muted amid the year-end
holidays, while in Hong Kong, premiums held steady at
$0.50-$1.50 as the pandemic continued to stifle activity.
    Despite lacklustre physical gold purchases, which forced
dealers in the world's biggest bullion consumer to offer steep
discounts on gold for most of 2020, dealers expect demand to
recover next year as consumer who held back on buying return to
the market.
    In Singapore, an uptick in demand marginally widened
premiums to $0.90-$1.30 an ounce from last week's $0.90-$1.20.
    "We've seen more corporates coming to buy (for year-end
gifts) and also retail buying; they are using this opportunity
of lower gold prices compared to the past few months to
purchase," said Brian Lan, managing director at dealer
GoldSilver Central.
    But dealers were worried about the spread of a more
infectious coronavirus variant that is up to 70% more
transmissible than the original.  urn:newsml:reuters.com:*:nL4N2JB1HS
    "Not all is rosy at this point, hopefully the vaccine will
control this new strain," Lan said.

 (Reporting by Sumita Layek in Bengaluru and Rajendra Jadhav in
Mumbai; Editing by Arun Koyyur)
 ((Sumita.Layek@thomsonreuters.com; Within U.S. +1 646 223 8780,
Outside U.S. +91 8061822693; Reuters Messaging:
Sumita.Layek.thomsonreuters.com@reuters.net))