Gold discounts in India remained steady this week as high prices kept buyers away, while Chinese traders demanded higher premiums in anticipation of stronger demand ahead of the Chinese New Year.
Indian traders offered a discount of up to $14 per ounce from official domestic prices, including the 6% import tax and 3% sales tax, with no change from the last week.
“Local gold prices have risen more than global prices in recent days due to rupee depreciation hitting a record high. This has dampened demand,” said Ashok Jain, owner of the gold wholesaler Chenaji Narsinghji, based in Mumbai.
The Indian rupee depreciated to a record low this week, making imports more expensive.
Domestic gold prices touched Rs 77,947 per 10 grams on Friday, after falling to Rs 75,459 last month.
“Jewelers have not been active in the market as investment demand is low. Many consumers are also avoiding buying gold during the Khar mass period,” said a Mumbai-based trader from a private bullion import bank.
The Hindu month of Khar Mass is considered an inauspicious time for buying gold.
In China, the world’s top gold consumer, traders offered premiums of $4.50 to $10 an ounce above spot prices, compared with a range of $2 to $5 last week.
“With the arrival of the Chinese New Year, I expect demand to increase, especially for investment purposes,” said Peter Fung, head of trading at Wing Fung Precious Metals.
While jewelry sales in the region are slowing according to sales figures reported by major retailers, physical demand for bullion is compensating, reflecting good demand for investment rather than ornament, according to independent analyst Ross Norman.
In Singapore, traders charged between par and spot prices and a premium of $2.50.
“This week, in the midst of the holiday season, we saw more festive buying as customers took advantage of lower gold prices,” said Brian Lan, managing director of GoldSilver Central.
International spot gold prices hit their lowest level in a week earlier this week before rising again.
In Hong Kong, gold was sold at a premium of $0.20 to $1.90, while in Japan, bullion was sold at discounts of $0.25 to the par level.
