Asia Gold-Retail demand picks up; Chinese New Year to draw buyers

SouthGobi Resources

22/01/2021 15:40

* Indian retail buyers making purchases for weddings
    * Premiums in China unchanged at $0.50-$4/oz

    By Eileen Soreng and Rajendra Jadhav
    BENGALURU/MUMBAI, Jan 22 (Reuters) - Demand for physical
gold picked up this week as the approaching Chinese New Year
encouraged buyers in China and Singapore, with dealers expecting
more purchases in coming weeks.
    Chinese dealers charged $0.50-$4 an ounce over benchmark
spot gold prices, unchanged from last week when they added a
premium having been forced to offer heavy discounts for much of
2020 as the pandemic squeezed retail demand.
    Buying crept up in Singapore and is expected to recover in
the coming weeks, traders said. Prices ranged between flat to
benchmark spot gold  XAU=  and a premium of $1.4 an ounce,
versus last week's $0.80-$1.80.
    "We envisage strong retail demand outlook over the next few
months on the back of seasonal factors such as the upcoming
Chinese New Year and the new 2021 bullion coin releases from the
major national mints," said Ronan Manly, precious metals analyst
at BullionStar Singapore.    
    Indian dealers were charging a premium of up to $1 an ounce
over official domestic prices this week, inclusive of 12.5%
import and 3% sales levies and up from last week's premium of
$0.5.
    "Slowly demand has been improving. Retail buyers are making
purchases for weddings," said Harshad Ajmera, the proprietor of
JJ Gold House, a wholesaler in the eastern Indian city of
Kolkata.
    On Friday, local gold futures  MAUc1  were trading around
49,100 rupees per 10 grams after hitting a one-month low of
48,537 rupees last week.
    A Mumbai-based bullion dealer with a gold importing bank
said jewellers are making small purchases at lower prices, but
many are waiting for the country's annual budget, which will be
presented on Feb.1. 
    In Hong Kong demand was muted with the metal being sold
between a discount of $2 to a premium of about $1.50, while in
Japan gold traded flat to spot prices.
    
    

 (Reporting by Diptendu Lahiri in Bengaluru and Rajendra Jadhav
in Mumbai; Editing by Kirsten Donovan)
 ((eileen.soreng@thomsonreuters.com; Within U.S. +1 646 223
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