Asia Gold-Price drop boosts India buying, lifts premiums to 8-mth high

SouthGobi Resources

19/02/2021 13:50

* India premiums jump to $7 an ounce versus $5 last week 
    * Activity resuming slowly in China after holiday
    * Premiums on silver products rising exponentially- dealer

    By Rajendra Jadhav and Bharat Gautam
    Feb 19 (Reuters) - Physical gold demand in India this week
surged as local prices dropped to their lowest levels since June
last year, with buying expected to pick up in other Asian
centres after the Chinese Lunar New Year holiday week.
    In India, dealers were charging a premium of up to $7 an
ounce over official domestic prices, the highest in eight
months. Last week they were charging a premium of up to $5
inclusive of 12.5% import and 3% sales levies.
    "Sales are robust. People are buying coins, bars and
jewellery because of price correction," said Chanda Venkatesh,
managing director of CapsGold, a bullion merchant based in the
southern city of Hyderabad.  urn:newsml:reuters.com:*:nL1N2K70TY
    On Friday, local gold futures  MAUc1  fell to 45,861 rupees
per 10 grams, the lowest level since June 2020.
    Supplies are limited but demand is robust from jewellers,
who are keen to build inventory for the festival and wedding
season, said a Mumbai-based dealer with a bullion importing
bank.
    Gold demand in China, the world's biggest bullion consumer,
is expected to rise after the Chinese New Year celebrations.
Customers were charged premiums of $5-$8 an ounce over benchmark
spot rates, unchanged from last week's prices. 
    In Singapore, premiums were charged in the range of $1-$2 an
ounce on gold, dealers said. 
    In Hong Kong, gold was sold between a discount of $4 and a
premium of $1.5 as the market remained quiet, dealers said. 
    Japanese dealers said they charged premiums between $0.50
and $1, unchanged from last week, as physical gold demand
remained strong on lower local prices. 
    Demand for physical silver also outstripped production,
dealers in multiple hubs said. 
    "Demand for silver is tight because refiners cannot shift
production overnight," said Joshua Rotbart at dealers J. Rotbart
& Co, adding that premiums on silver products are going up
exponentially.

 (Reporting by Asha Sistla and Bharat Govind Gautam in
Bengaluru, Rajendra Jadhav in Mumbai; additional reporting by
Swati Verma; Editing by Ramakrishnan M.)
 ((BharatGovind.Gautam@thomsonreuters.com; +91-80-6182-3021/
3590 (If within U.S. call 651-848-5832 );))