Mumbai: Gold demand in India was sluggish this week as prices rebounded sharply ahead of the festive season, with buyers holding back in hopes of a correction, Reuters reported.
Domestic gold prices were trading around Rs 150,900 per 10 grams on Friday, up from Rs 145,538 last week — the lowest level in nearly two months. International spot gold rose more than 1 percent, rebounding from a two-month low.
Buyers wait for a correction
"Consumers are highly price-sensitive. The moment prices rise, they hit the pause button and wait for a correction," an Ahmedabad-based jeweller told Reuters.
Dealers quoted a discount of up to $6 an ounce over official domestic prices this week — inclusive of 15 percent import and 3 percent sales levies — compared with a discount of up to $14 last week. A Mumbai-based dealer with a private bank said discounts have narrowed as imports declined, adding that if investment demand picks up during the festive season, as it did last year, the market could shift to a premium.
Festive season ahead
Indians celebrate Dussehra in October and Diwali in early November, when buying gold is considered auspicious. The price rebound has come at an awkward time for jewellers, who were counting on festive footfalls.
Trading in China, the other top consumer, was subdued during the holiday-truncated Golden Week period. As markets reopened, Chinese bullion traded at a premium of $10 an ounce to the global benchmark, while Singapore saw premiums of 50 cents to $1.50 and Hong Kong traded flat to a $1 premium.
Sources:
The Hindu BusinessLine (Reuters): Gold demand drops in India as prices rebound
www.thehindubusinessline.com
Domestic gold prices were trading around Rs 150,900 per 10 grams on Friday, up from Rs 145,538 last week — the lowest level in nearly two months. International spot gold rose more than 1 percent, rebounding from a two-month low.
Buyers wait for a correction
"Consumers are highly price-sensitive. The moment prices rise, they hit the pause button and wait for a correction," an Ahmedabad-based jeweller told Reuters.
Dealers quoted a discount of up to $6 an ounce over official domestic prices this week — inclusive of 15 percent import and 3 percent sales levies — compared with a discount of up to $14 last week. A Mumbai-based dealer with a private bank said discounts have narrowed as imports declined, adding that if investment demand picks up during the festive season, as it did last year, the market could shift to a premium.
Festive season ahead
Indians celebrate Dussehra in October and Diwali in early November, when buying gold is considered auspicious. The price rebound has come at an awkward time for jewellers, who were counting on festive footfalls.
Trading in China, the other top consumer, was subdued during the holiday-truncated Golden Week period. As markets reopened, Chinese bullion traded at a premium of $10 an ounce to the global benchmark, while Singapore saw premiums of 50 cents to $1.50 and Hong Kong traded flat to a $1 premium.
Sources:
The Hindu BusinessLine (Reuters): Gold demand drops in India as prices rebound
Gold demand drops in India as prices rebound
Gold demand in India weakens as prices rise ahead of festive season, with cautious buyers awaiting corrections and discounts narrowing.
