India demand still lacklustre, premiums hold firm in China
- Premiums of $15-$21/oz charged in China
- Gold was imported ahead of Akshay Tritiya festival in India
- Spot gold prices surpassed the $3,300/oz mark
Demand for physical gold was tepid in India this week as a blistering price rally curbed purchases, while premiums held firm in top consumer China.
Indian dealers offered a discount (XAU-IN-PREM) up to $74 an ounce over official domestic prices, including 6% import and 3% sales levies, up from last week’s discount of up to $33 an ounce.
Demand has virtually evaporated due to an unprecedented price rally that even the bulls didn't anticipate two to three months ago, said a Mumbai-based dealer at a private bullion importing bank.
Domestic gold prices (MAUc1) hit a record high of 95,894 rupees per 10 grams earlier on Thursday.
Banks increased their imports in March at prices considerably lower than the current market rate, and they are now offering these supplies at a substantial discount, said an Ahmedabad-based bullion dealer.
"Gold was imported ahead of Akshay Tritiya festival, but now it looks like demand would be low during the festival because of the price spike," the dealer said.
In top consumer China, dealers charged premiums of $15-$21 an ounce over global benchmark spot prices, compared to premiums of $24-$54 last week. (XAU-CN-PREM)
However, "we hear demand for physical in China remains robust despite record prices - this is a departure from the norm where Asian buyers might be expected to exhibit price sensitivity," said Ross Norman, an independent analyst.
Spot gold prices surpassed the $3,300 mark as investors sought safe-havens due to escalating trade tensions between the U.S. and China and concerns over global economic growth.
In Hong Kong, gold (XAU-HK-PREM) was sold at par to $2.10 premium, while in Singapore (XAU-SG-PREM), gold traded at par with the global benchmark to a premium of up to $2.50 per ounce,
In Japan, bullion (XAU-TK-PREM) was sold at discount of $1 to a $0.5 premium.
"As China's still buying large every day the gold yen price keep going up ... local investors still buy gold but the size is getting smaller than before," said a Tokyo-based trader.
