Physical gold traders in India applied premiums for the first time in two months this week as the holiday season attracted some jewelry buyers, while consumer weakness dampened demand in China after the holidays.
Indians will celebrate the festival of Dussehra on October 12 and Diwali at the end of October, during which the purchase of gold is considered auspicious.
“Although the price of gold has increased recently, leading to some slowdown in sales over the last couple of days, the overall sentiment remains positive,” said Saurabh Gadgil, president of PNG Jewelers in India.
The price of gold in the Indian domestic market touched an all-time high of Rs 76,331 per 10 grams earlier this week.
Indian traders charged a premium of up to $3 per ounce over official domestic prices, including 6% import taxes and 3% sales taxes, compared with a discount of $21 last week .
Indian traders last asked for premiums for the week ending August 9, but these have since declined in response to a record rise in spot gold prices. [GOL/]
Jewelers have seen good footfall, but in terms of volume, sales are lower than usual due to record high prices, said a Mumbai-based bullion trader working with a private bank.
The rebound in gold prices to a record high has dashed the Indian gold industry’s expectations for the lucrative festival season, after their hopes were boosted by a sharp cut in duties import two months ago.
At the same time, Chinese traders, major consumers of gold, offered the metal at discounts of $15 to $31 to international spot prices, but retail stores did not show much interest after the return of the Golden Week holidays.
The prices “reflect generally weak Chinese domestic demand as funds have been diverted to stock markets following recent stimulus measures,” said independent analyst Ross Norman.
In Hong Kong, gold prices fluctuated between a discount of $2 and a premium of $1.50, a slight change from the previous week.
In Singapore, brokers sold gold between par and a premium of $2.20, and in Japan between a discount of $0.25 and a premium of $0.5.
