Lustre of gold fades in India amid volatile prices
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A salesman showing gold necklaces to a customer at a jewellery showroom, after Indian authorities eased lockdown restrictions that were imposed to slow the spread of the coronavirus, in Kolkata on Aug 10. Physical gold dealers in the country are offering the highest discounts in more than 1½ months, as buyers stayed away even as more bullion flowed in from the United Arab Emirates.
PHOTO: REUTERS
MUMBAI/BENGALURU • Physical gold dealers in India are offering the highest discounts in more than 11/2 months, as buyers stayed away even as more bullion flowed in from the United Arab Emirates.
Last Friday, gold futures in India, traditionally the world's second-biggest gold consumer after China, were trading at around 51,800 rupees per 10g, having surged to a record high of 56,191 rupees earlier this month.
"A significant amount of gold was imported from Dubai last week and Customs cleared that this week. But demand is not there because of volatile prices," Mr Chanda Venkatesh, managing director of CapsGold, a bullion merchant in the city of Hyderabad, said last week.
Discounts of up to US$20 (S$27) an ounce were offered against official domestic prices - including 12.5 per cent import and 3 per cent sales levies - versus the US$2 premiums two weeks ago.
The country remained in the grip of the coronavirus, with the third-highest number of cases globally.
Demand suffered in China as well, where discounts eased slightly to US$70-US$80, from record US$75-US$100 levels two weeks ago, versus international benchmark spot prices, which traded in a volatile US$1,911 to US$2,014.97 an ounce range.
"The pandemic situation is unlikely to go away this year, so don't expect much change," said Mr Peter Fung, head of dealing at Wing Fung Precious Metals.
Gold has been sold at discounts in China since February.
But it has reportedly become more difficult to buy gold scrap, said Mr Samson Li, a Hong Kong-based analyst at Refinitiv GFMS.
The price difference between China and other markets is too huge and retailers have started to hoard gold materials, he added.
Premiums of US$1 to US$1.50 were charged in Singapore, with some using price dips to buy bullion. Said Mr Brian Lan of Singapore dealer GoldSilver: "We still see many more clients looking at silver."
In Japan, gold was sold at 50 US cent premiums. "Our silver ingots are all sold out again," a trader at Tokyo-based retailer Tokuriki Honten said.
REUTERS
