Asia Gold-Lockdowns cripple Indian market as discounts hit 8-month high

SouthGobi Resources

21/05/2021 12:55

* India prices at highest in nearly 4 months
    * China premiums at $7-$10/oz amid stable demand
    * Higher prices weigh on buying in Singapore

    By Rajendra Jadhav and Brijesh Patel
    May 21 (Reuters) - Widespread lockdowns coupled with a jump
in domestic prices stifled the physical gold market in India, as
it grappled with a fierce COVID-19 wave, forcing dealers to
offer the steepest discounts in eight months.
    "There's hardly any movement in bullion market as jewellery
stores are closed across the country," said Harshad Ajmera, the
proprietor of JJ Gold House, a wholesaler in Kolkata. 
    If lockdown restrictions are eased from June 1, demand could
start improving, Ajmera added
    Most Indian states have imposed curbs, with coronavirus
infections crossing 26 million on Thursday.  urn:newsml:reuters.com:*:nB8N2MC01M
    Dealers offered discounts of up to $10 an ounce, the highest
since mid-September 2020, over official domestic prices —
inclusive of the 10.75% import and 3% sales levies — versus the
$5 discount last week.
    Banks and dealers are offering gold imported in April at a
discount as global prices were then lower, said a Mumbai-based
bullion dealer with a gold importing bank.
    Local gold futures  MAUc1  jumped to 48,875 rupees earlier
this week, a peak since Feb. 1.
    Top consumer China saw stable demand, with premiums little
changed at $7-$10 an ounce over benchmark spot gold prices.
 GOL/ 
    "Demand is healthy although we aren't going to see traders
paying up high premiums," said Bernard Sin, regional director of
Greater China at MKS.
    "We believe China is waiting for lower premiums to import
more and for borders to open," Sin added.
    In Hong Kong, premiums of $1-$2 an ounce were charged,
versus $1.8-$2 last week.
    Singapore premiums were little changed at $1.4-$1.8.
    "This week Singapore just started their 'Phase 2 Heightened
Alert', which is similar to a semi-lockdown (and that) coupled
with higher prices this week, demand has dipped a little," said
Brian Lan, managing director at dealer GoldSilver Central.
    "However we noticed an increase in sell back from retail and
wholesalers, probably to capitalise on higher prices."
    Japanese dealers sold gold at a $0.50 premium.
    

 (Reporting by Brijesh Patel and Arpan Varghese in Bengaluru;
Editing by Amy Caren Daniel)
 ((arpan.varghese@thomsonreuters.com))