Asia gold demand pauses due to price increase

This week, demand for physical gold decreased in India as customers put off purchases due to rising local prices, while premiums in the largest consumer were supported by a depreciating Chinese currency.

Up from the $3 premium the previous week, Indian dealers were now asking a premium of up to $4 per ounce over the official domestic prices, inclusive of the 15% import and 3% sales levies.

“Price fluctuation is perplexing customers. Many prospective purchasers are anticipating a price correction, according to a dealer with a private bullion importing bank in Mumbai.

Following a drop to 59,225 rupees last week, local gold prices were trading at roughly 60,200 rupees per 10 grammes on Friday.

Despite the government’s decision to withdraw notes having a face value of 2,000 rupees last week, there was a substantial decline in transactions involving these notes this week, according to a bullion dealer in Chennai.

Asia’s gold: India returns to premiums as buyers are attracted by lower prices

Premiums of $1.50 to $9 per ounce were levied over international benchmark spot prices in China, the world’s largest consumer of the precious metal, as opposed to a range of $2 to $6.50 last week.

According to Bernard Sin, regional director, Greater China at MKS PAMP, a depreciation of the RMB due to worries over a slowing Chinese economy might result in premium increases of $10 to $15.

This week, as a result of poor economic data, the value of the Chinese yuan against the dollar reached six-month lows.

Analysts, however, noted that domestic demand for safe-haven bullion was still rather moderate.

Before making physical purchases, consumers might wait for prices to drop much more, to around $1,850/oz or 416/gm of Chinese yuan, suggested Debajit Saha, lead metals analyst at LSEG.

Peter Fung, head of dealing at Wing Fung Precious Metals, observed a respectable amount of retail buying interest in Hong Kong, with bullion being sold at a premium of $2.50 to the market price.

Premiums in Singapore ranged from $1.50 to $2.50.

According to Brian Lan, managing director at dealer GoldSilver Central, people were selling gold bars and jewellery to make a profit and for liquidity.

Japanese merchants offered a premium of $0.50 when selling metal at parity with the market rate.

Muhammad Rabee is a technology enthusiast and an experienced writer who covers topics related to education, tech and device reviews. He has been writing for the past five years and has a special interest in how technology can be used to improve learning outcomes. Rabee has a Bachelor's degree in Computer Science and has worked in various tech-related roles. He is passionate about helping people understand and leverage the power of technology to make their lives easier. He enjoys sharing his knowledge and insights with others and loves to write about the latest trends in technology.