Gold demand in India remained subdued this week as price volatility prompted potential buyers to postpone purchases, while rising rates in China are expected to potentially offset upcoming seasonal demand.
After high volatility in gold prices over the past two weeks, buyers are now adopting a wait-and-see approach, hoping that prices fall further, said a Chennai-based jeweler.
In India, domestic prices fell to 75,459 rupees ($887.28) per 10 grams earlier this week after rising to 79,120 rupees last week.
Indian traders this week offered a discount of up to $8 per ounce from official domestic prices, including the 6 percent import tax and 3 percent sales tax, down from at last week’s discount of up to $9.
“Jewellers stayed on the sidelines this week, waiting for the Federal Reserve to cut interest rates. They were then surprised by the rupee falling to a record low,” said a trader based in Mumbai and working for a private bank importing bullion.
India’s gold imports are expected to see a sharp slowdown in December, as soaring gold prices have prompted many Indian families to opt for lightweight, low-carat jewelry.
Switzerland’s gold exports increased in November due to an increase in deliveries to India and some recovery in deliveries to China and Hong Kong compared to October.
High bullion prices have also dampened demand in other Asian regions, including top gold consumer China, where discounts of around $5 per ounce from the international price have been offered, according to the independent analyst Ross Norman…
In China, high gold prices are one thing, but in January, demand could increase in the run-up to the Chinese New Year, even though the Chinese will not buy the very heavy metal, said Dick Poon, director General Manager of Heraeus Metals Hong Kong Ltd.
In Japan, traders offered a premium of $1.5 an ounce for discounts of up to $4.5, while in Hong Kong, gold was sold at a premium of $2, a declared a trader.
($1 = 85.0450 Indian rupees)
