Indians brush off record rates to load up on gold for Diwali
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Indian buyers brushed off record high local prices this week making gold purchases during the Diwali festival week in the country, while China premiums remained buoyant after the top-buyer continued to accumulate gold holdings.
"Demand improved gradually this week. It was as good as last year despite record high prices," said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in the eastern Indian city of Kolkata.
Local gold prices were trading around 60,900 rupees($731.81) per 10 grams on Friday after hitting an all-time high of 61,914 rupees($744.00)this week.
Sales of coins and bars picked up from the last weekend, while demand for jewellery also improved, said a Mumbai-based bullion dealer with a private bank.
Dealers were offering a discount of up to $3 an ounce over official domestic prices — inclusive of the 15% import and 3% sales levies, down from the last week's discount of $4.
In China, dealers charged premiums of $43-$58 per ounce over global spot prices, up from last week's $40-$50.1.
"In October, China extended its 12-month streak of increasing gold holdings, providing crucial support to physical premiums," said Bernard Sin, regional director of Greater China at MKS PAMP.
"With no recent issuance of import quotas, the expectation is for gold premiums to remain at the current level through the end of the month."
As of end-October, China held 71.20 million fine troy ounces of gold, up from 70.46 million at end-September.
Bullion was sold at premiums of $1.5-$2.5 per ounce in Hong Kong and Singapore..
In Japan, gold changed hands at anywhere between $0.10 discounts and $1 premiums.
