Asia Gold-India swings to discount as pandemic stalls demand

SouthGobi Resources

30/04/2021 14:07

* Jewellery stores witnessing negligible footfalls- Mumbai
dealer
    * India offers discounts of $2/oz versus $2 premium last
week
    * Demand up 30% vs last week on price volatility -Singapore
dealer

    By Rajendra Jadhav and Sumita Layek
    April 30 (Reuters) - Physical gold in India was sold at a
discount this week for the first time in 2021 as a spike in
coronavirus cases prompted strict restrictions and kept buyers
away.
    Several Indian states have run out of coronavirus vaccines
as new infections surged to another daily record. urn:newsml:reuters.com:*:nL1N2MN075
    "Almost every state government has put some kind of COVID-19
restrictions... jewellery stores are either closed or witnessing
negligible footfalls," said a Mumbai-based dealer with a bullion
importing bank.
    Dealers were offering a discount of up to $2 an ounce this
week over official domestic prices, inclusive of 10.75% import
and 3% sales levies, from last week's premium of $2.
    "Jewellers have nearly stopped buying. They don't know when
retail demand will pick-up," said a bullion dealer based at
Bangalore in the southern state of Karnataka.
    India's gold consumption is expected to falter in the June
quarter due to the lockdowns, the World Gold Council said on
Thursday.  urn:newsml:reuters.com:*:nL1N2MM06U
    In top consumer China, premiums of $8-$10 were charged over
benchmark spot gold prices, unchanged from last week.  XAU= 
    "We are seeing good volume exchange hands ahead of super
long weekend in China," said Bernard Sin, regional director,
Greater China at MKS Switzerland.
    "As long as interest rates remain low, we will continue to
see investment interest shifting into gold."
    China will celebrate Labour Day holiday from May 1-5.
    In Singapore, premiums widened to $1.5-$2.0 from $1.6-$1.8
previously.
    "We actually have seen a lot more demand, probably 30%
higher than last week" due to the volatility in gold prices,
said Brian Lan, managing director at dealer GoldSilver Central.
    In Hong Kong, premiums of $0.8-$1.8 an ounce were charged
versus $1.2-$1.8 last week.
    In Japan, gold was sold at flat to premiums of $0.50 amid
Golden week holidays and new COVID-19 emergencies in some
regions.  urn:newsml:reuters.com:*:nL1N2MN05Z

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