You are here: Home » Markets » Commodities » commodity gold
Business Standard

Asia gold price dip props up demand, Indian buyers await lower prices

In India, a fall in gold prices to the lowest level in five months failed to lift physical demand

Reuters  |  Bengaluru/Mumbai 

gold, gold imports

in most Asian centres firmed this week, spurred on by a dip in prices although buyers in the world's second-biggest consumer India held off buying in the hope of further falls.

Spot touched $1,235.92 an ounce this week, its lowest level since July 20.

"Very good (in Asia) this week. Prices below $1,250 an ounce a clear buy signal for many," said Cameron Alexander, an analyst with Thomson Reuters-owned metals consultancy GFMS.

In top consumer China, premiums rose up to $9-$10 an ounce over the international benchmark, from $6-$9.50 last week.

Premiums were higher in anticipation of tighter supplies in towards the year end, as most refineries shut for the Christmas and New Year holidays, traders said.

In Singapore, premiums rose to 80 cents-$1.20 an ounce, compared with 70 cents-$1 the previous week. Hong Kong prices were at a premium of 70 cents-$1.40, barely changed from last week.

Premiums in Tokyo were quoted at 25 cents per ounce, unchanged from last week, when prices shifted to a premium for the first time in more than four months.

"Because prices were lower, this week stayed strong ... if prices do not change much, strong will continue," a Tokyo-based trader said.

In India, a fall in prices to the lowest level in five months failed to lift physical

"The appreciating rupee is giving jewellers a reason to delay purchases.

It seems they will build inventory only after the Christmas break," said a Mumbai-based dealer. "Unless there is sharp drop in prices, they won't increase purchases."

The rupee hit a three-month high against the dollar on Friday, making imports cheaper for banks and bullion dealers.

After the Diwali festival, jewellers had been banking on wedding season demand, but wedding related purchases were muted, he said.

"Retail is still weak. It could improve from next week due to Christmas," said Harshad Ajmera, the proprietor of JJ House, a wholesaler in the eastern Indian city Kolkata.

Dealers in India were offering a discount of up to $2 an ounce this week over official domestic prices, compared with $3 discount last week. The domestic price includes a 10 percent import tax.

Local prices fell to 28,055 rupees per 10 grams on Tuesday, the lowest level since July 17.

First Published: Fri, December 15 2017. 20:29 IST