Asia Gold-Second coronavirus wave stifles demand in India

SouthGobi Resources

23/04/2021 13:20

* Buyers unwilling to step out due to COVID-19 - Indian
wholesaler
    * China premiums rise to $8-$10/oz versus $7-$9 last week
    * Consumers reluctant due to higher prices - Singapore
dealer

    By Rajendra Jadhav and Sumita Layek
    April 23 (Reuters) - India's physical gold demand faltered
this week as strict restrictions to contain the spread of
COVID-19 kept buyers away, while activity in other top hubs
remained largely muted due to higher prices.
    Many Indian states have imposed curbs amid a record surge in
infections.  urn:newsml:reuters.com:*:nL1N2MG071
    The second wave has been badly affecting demand as many
showrooms are closed due to restrictions, said Harshad Ajmera,
the proprietor of JJ Gold House, a wholesaler in the city of
Kolkata.
    "Suddenly, demand has gone down. Consumers are also not
willing to step out of their homes due to the coronavirus
outbreak," he said.
    Premiums eased to about $2 an ounce over official domestic
prices, inclusive of 10.75% import and 3% sales levies, from
last week's $4.
    "Jewellers have been reducing purchases because of weak
retail demand. It seems demand would remain weak for the next
few weeks considering the way coronavirus cases are rising,"
said a Mumbai-based dealer with a bullion importing bank.
    This was in contrast to March, when Swiss monthly gold
exports to India touched their highest since 2013, amid a
gradual pick-up in demand.  urn:newsml:reuters.com:*:nL1N2MF15U
    In China, premiums of $8-$10 were charged over benchmark
spot gold prices, against $7-$9 last week.  XAU= 
    With premiums at these levels, "we don't see anyone rushing
to jump in. I expect a dip down to $3/$4 in order to trigger
more buying interest," said Bernard Sin, regional director,
Greater China at MKS Switzerland.
    In Hong Kong, premiums of $1.2-$1.8 an ounce were charged
versus $0.50-$2 last week.
    In Singapore, premiums stood around $1.6-$1.8, from $1.8
previously. 
    "Prices are higher so people are sitting on the sidelines,"
said Brian Lan, managing director at dealer GoldSilver Central.
    Wholesalers are rather quiet as supply chain disruptions due
to COVID-19 measures have pushed up premiums, Lan added.
    In Japan, premiums of $0.50 were being charged, amid weak
demand.

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