Higher prices stall gold demand in India; activity dim elsewhere
Physical gold demand was subdued in India this week as a rebound in domestic prices kept consumers away, while activity in other top hubs also remained lacklustre.
"Demand has started moderating due to rising prices. Retail buyers are taking a pause," said Mukesh Kothari, director at Mumbai gold dealer RiddiSiddhi Bullions.
On Friday, local gold futures were trading around 45,000 rupees per 10 grams after falling to 44,150 rupees earlier this month, the lowest level since April 7.
Dealers were charging a premium of up to $6 an ounce this week over official domestic prices, inclusive of 10.75% import and 3% sales levies, unchanged from last week.
"Jewellers have been reducing purchases. They fear authorities could put restrictions on shops and malls due to rising coronavirus cases," said a Mumbai-based dealer with a bullion importing bank.
India's coronavirus infections surged to an over three-month high on Friday, led by a record daily increase in the western state of Maharashtra, prompting authorities to place fresh curbs to restrain the spread of the disease.
In China, gold was sold at premiums of $7-$9 an ounce over benchmark spot gold prices, down from last week's $8-$10, while in Hong Kong, premiums of $0.50-$1.70 were being charged versus $0.80-$2.50 last week.
"It is quiet. There are no visitors as the borders are not open so Hong Kong is losing a lot of Chinese customers," said Ronald Leung, chief dealer for Lee Cheong Gold Dealers in Hong Kong.
In Singapore, premiums dipped to $1.5-$2 an ounce from $1.60-$2.50 charged a week earlier.
In Japan, premiums of $0.50-$0.75 an ounce were being charged versus last week's $0.75.
"We're seeing more investors selling their bars to us this week," a trader at Tokyo-based retailer Tokuriki Honten said.