May 9, 2021

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second biggest bullion consumer

Indian gold demand shines as local rates dip; buying steady elsewhere


(Reuters) – Physical gold demand in the world’s second biggest bullion consumer India got a fillip this week from a slide in local rates due to gains in the rupee, while buying was steady in other top Asian hubs.second biggest bullion consumer

“The appreciating (Indian) rupee has brought down prices. At this price level, jewellers and retail buyers are quite comfortable in making purchases,” said Ashok Jain, proprietor of Mumbai-based wholesaler Chenaji Narsinghji.

Local gold prices were trading near their lowest in about three months as an appreciation in the rupee made overseas buying cheaper.

After decent sales during the Diwali festival, jewelers have been replenishing inventories for the wedding season, a Mumbai-based dealer with a private bank said.

Gold is considered an essential part of weddings in India, when adorning and giving gold as a gift are common practices.

Dealers in India were charging a premium of up to $2 an ounce over official domestic prices, unchanged from the last week. The domestic price includes a 10 percent import tax.

Benchmark spot gold edged lower on Friday, ahead of the G20 meeting in Argentina this weekend, where U.S. and Chinese leaders are scheduled to discuss trade matters after months of tensions, but prices were on track to notch a second straight month of gains.

In China, premiums of $6-$7 an ounce were charged over the benchmark, versus $4-$6 last week, while in Hong Kong, premiums were quoted at $0.90-$1.50, against the previous week’s $0.70-$1.50 range, with steady demand in the region, traders said.

In Singapore, premiums were in the $0.70-$0.90 level, compared with last week’s $0.50-$0.80.

The physical gold market has been quiet in Singapore following the festive period, said Brian Lan, managing director at Singapore dealer GoldSilver Central.

But there are some private funds buying gold, maybe as a hedge given the current geopolitical scenario, he added.

In Japan, prices were on par with the benchmark and buying was tepid, a Tokyo-based trader said.

Reporting by Eileen Soreng in Bengaluru; editing by David Evans

Our Standards:The Thomson Reuters Trust Principles.

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