By Rajendra Jadhav and Daksh Grover
(Reuters) – Gold demand in India improved slightly this week due to an upcoming festival but remained lower than usual because of record-high prices, while Chinese markets were closed for a holiday.
“With the Dussehra festival coming up, retail demand is starting to pick up, but it’s still much lower than usual. The record-high prices are causing a lot of shoppers to hold off on making purchases,” said a Kolkata-based jeweller.
Indians will celebrate Dussehra on Oct. 12, when buying gold is considered auspicious.
Indian dealers offered discounts of up to $21 an ounce this week over official domestic prices, inclusive of 6% import and 3% sales levies, up from the last week’s discount of $19.
Domestic prices jumped to a record high of 76,000 rupees per 10 grams last week, an increase of nearly 13% from a four-month low of 67,400 rupees reached on July 25.
Jewellers are not confident about demand during the festive season and are taking it slow on building up stock, said a Mumbai-based bullion dealer with a private bank.
Chinese markets were closed for the Golden Week holiday. Gold discounts in the top consumer widened last week to $16-$7 as demand continued to remain weak.
In Hong Kong, gold was sold between a $2 discount and $2 premium.
There hasn’t been any special interest in physical gold in Hong Kong and Singapore, and current market dynamics are favouring spot gold over physical gold, said Peter Fung, head of dealing at Wing Fung Precious Metals, Hong Kong.
Singapore dealers sold bullion between a $0.60 discount and $2.20 premium
“We continue see more selling than buying. Most retail buyers made only small purchases,” said Brian Lan at Singapore-based dealer GoldSilver Central.
In Japan, traders quoted a $0.25 discount to $1 premium.
(Reporting by Daksh Grover in Bengaluru and Rajendra Jadhav in Mumbai; Editing by Sonia Cheema)
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