Diwali festival. Stock image.
Physical gold demand picked up in major Asian hubs this week, as lower prices encouraged Indian retail buying ahead of the key Diwali festival and drew Chinese buyers back into the market after global benchmark gold slipped below $4,000 an ounce.
In India, domestic gold prices MAUc1 were trading around 141,600 rupees (about $1,504) per 10 grams on Friday, after falling to 137,863 rupees last week, the lowest level since March 24.
“Jewellery stores are witnessing increased footfall. Retail buying has improved significantly this week as consumers have begun making purchases ahead of the Diwali festival,” a Mumbai-based bullion dealer with a private bank said.
Dealers quoted a premium XAU-IN-PREM of up to $4 an ounce over official domestic prices this week, inclusive of 15% import and 3% sales levies, compared to last week’s premium of up to $7.
Price volatility continues to limit a sharper rise in demand, although buying is expected to pick up on Friday for Dhanteras, said Daman Prakash Rathod, director at MNC Bullion, a wholesaler in Chennai.
Dhanteras, which marks the start of the five-day Diwali festival of lights in much of India, is one of the busiest gold-buying days in the world’s second-biggest consumer of the metal.
In China, bullion XAU-CN-PREM traded from flat to a $9-an-ounce premium over global benchmark prices.
“There have been some signs of increased interest in the jewellery market, albeit from a very low base, as prices had come down to below $4,000,” said Rhona O’Connell, head of market analysis at StoneX.
International spot gold prices XAU= fell more than 1% on Friday, as prices remained under pressure from high energy costs after hitting a one-year low of $3,869.85 an ounce on October 30. Elevated oil prices can lead to higher interest rates as central banks move to curb inflation, hurting demand for non-yield-bearing gold. GOL/
Elsewhere, in Singapore XAU-SG-PREM, gold traded between a $1 discount and a $1.70 premium this week, while in Hong Kong XAU-HK-PREM, gold was sold between a 50-cent discount and a $1.80 premium this week.
In Japan XAU-TK-PREM, gold was sold between a $6 discount and a 50-cent premium this week.
($1 = 94.1550 Indian rupees)
(Reporting by Sukanya Mitra in Bengaluru and Rajendra Jadhav in Mumbai; additional reporting by Swati Verma; Editing by Jochelle Mendonca)
Source: www.mining.com
