Asia Gold-Indian dealers offer discounts for first time in 6 weeks as buying slows

SouthGobi Resources

18/12/2020 12:23

* India gold discount at $1/oz vs premium of $2.5 last week
    * China discounts narrow to $16-$20/oz from $19-$24
    * People too cautious to spend  savings right now -dealer
    * Spot gold prices on track for 3rd consecutive weekly gain

    By Diptendu Lahiri and Rajendra Jadhav
    BENGALURU/MUMBAI, Dec 18 (Reuters) - Physical gold in India
was sold at a discount for the first time in six weeks as a
rebound in local prices to a one-month peak squeezed demand,
while purchases slowed in other Asian hubs ahead of the year-end
holidays.
   India's local gold futures  MAUc1  jumped to 50,642 rupees
per 10 grams on Thursday, the highest level since Nov. 18.
    "Demand is very subdued. Retail buyers are postponing
purchases because of a price rise," said Ashok Jain, proprietor
of Mumbai-based gold wholesaler Chenaji Narsinghji.
    Dealers were offering a discount of up to $1 an ounce over
official domestic prices this week, inclusive of a 10 percent
import tax and 3 percent sales tax, down from last week's
premium of $2.5. 
    In China, discounts of $16-$20 an ounce were being offered
compared with last week's range of $19-$24, while gold was being
sold at a premium of around $0.50 cents in Hong Kong.
    "It's the year-end and jewellers are trying to finish the
inventories and they have adequate, so they are not making any
new purchases," said Dick Poon, general manager at Heraeus
Metals Hong Kong Ltd.
    China, traditionally the world's biggest consumer of gold,
saw a sharp drop in gold consumption due to the coronavirus
pandemic, forcing bullion sellers to offer steep discounts in
the past few months.
    "China is still fighting the aftermath of the virus...
People are too cautious to spend their savings right now," said
Ronald Leung, chief dealer for Lee Cheong Gold Dealers in Hong
Kong. 
    Physical gold in Singapore was being sold at a premium
ranging from 80 cents to $1.30 an ounce over the global
benchmark prices, compared with premiums of about $1.20 an ounce
last week. 
    Demand remained subdued in Japan, traders said, with gold
being sold between flat and a $0.50 premium to benchmark prices.
    Spot gold prices  XAU=  were on track for their third
straight weekly gain, having hit a one-month high of $1,895.81
on Thursday.  GOL/ 

 (Reporting by Diptendu Lahiri in Bengaluru and  Rajendra Jadhav
in Mumbai; Additional reporting by Bharat Govind Gautam and
Swati Verma; Editing by Mark Heinrich)
 ((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))