Asia Gold-India discounts widen, Singapore demand up on festival buying

SouthGobi Resources

24/12/2020 13:04

* India gold discount at $2/oz vs $1/oz last week
    * Pent-up demand might boost consumption in China- dealer
    * Singapore gold market impacted by shut borders- traders
    * Spot gold prices set for first weekly loss in four

    By Sumita Layek and Rajendra Jadhav
    BENGALURU/MUMBAI, Dec 24 (Reuters) - Physical gold discounts
rose in India this week as buyers remained on the sidelines,
while demand in Singapore and other Asian hubs ticked up as
buyers took advantage of lower prices ahead of holidays.
    Indian consumers avoided gold purchases due to Khar Mass, a
period considered to be inauspicious that runs from Dec. 15 to
Jan. 14.
    "People are more focused on holidays than making big ticket
purchases," said Mukesh Kothari, director at Mumbai gold dealer
RiddiSiddhi Bullions, adding demand would remain subdued next
week.
    Dealers were offering a discount of $2 an ounce this week
over official domestic prices, inclusive of 12.5% import and 3%
sales levies, up from last week's $1.
    Spot gold prices  XAU=  were set to mark their first weekly
decline in four. GOL/ 
    In China, discounts narrowed to $15-$20 an ounce, versus
last week's $16-$20, while in Hong Kong, premiums of $0.50-$1.50
were being charged from last week's $0.50.
    Physical gold has traded at a discount since March in China,
the world's biggest bullion consumer, as the coronavirus
pandemic deterred buying.
    Dealers said lower prices going into festivities and pent-up
demand might boost consumption.
    In Singapore, gold was being sold at a premium of
$0.90-$1.20 an ounce over global benchmark prices, compared with
$0.80-$1.30 last week, as demand picked up on gift buying ahead
of Christmas, traders said.
    However, the Southeast Asian island has lost out on tourist
demand this year, having kept its borders largely shut for most
of 2020 to curb the virus.
    "With end-user demand originating from Indonesia and
Malaysia in the last few years for the Singapore market, the
sealed borders have limited the volumes," said Rahul Kedia,
Director at Arihant Jewellers.    
    In Japan, gold was being offered at a $0.50 premium over
benchmark prices.

 (Reporting by Sumita Layek in Bengaluru and Rajendra Jadhav in
Mumbai. Additional reporting by Diptendu Lahiri. Editing by Mark
Potter)
 ((Sumita.Layek@thomsonreuters.com; Within U.S. +1 646 223 8780,
Outside U.S. +91 8061822693; Reuters Messaging:
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