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Gold buying picks up in India on low prices

Reuters  |  MUMBAI/BENGALURU 

By and Apeksha Nair

MUMBAI/BENGALURU (Reuters) - Demand for physical gold in picked up this week as prices fell to a five-month low, but buyers in other major centres in awaited a bigger correction before placing orders, traders and analysts said.

"In last few days the and international prices are moving in favour of buyers. Jewellers are placing orders," said a Mumbai-based with a

The rose to its highest in a fortnight on Friday, rebounding from last month's record low.

In the Indian market, gold futures were trading around 30,096 rupees per 10 grams, after falling to 30,072 rupees earlier in the day, the lowest level since Feb. 14.

Dealers in were charging a of up to $1.5 an ounce over official domestic prices this week, unchanged from the last week. The domestic price includes a 10 percent import tax.

"Prices have come down but the correction is not attracting investment demand. Prices need to fall to 28,000 rupees to bring back investors," said Bachhraj Bamalwa, a bullion based in the eastern city of

India's gold imports fell for a sixth month in June to 44 tonnes as a drop in the to record lows lifted local prices to a near 21-month high, curtailing demand.

Imports in July could rise to 60 tonnes if prices remain at current levels, the at the said.

In top consumer China, premiums of $1-$4 an ounce were being charged over the international benchmark versus $2-$5 an ounce last week.

"The weak yuan is affecting demand ... Other investment areas are more favourable than gold, especially amidst a trend of higher interest rates," said Ronald Leung, at Lee Cheong Gold Dealers in Hong Kong.

Premiums in Hong Kong were between 60 cents and $1.30, mostly unchanged from last week.

In Singapore, premiums were quoted between 80 cents and $1.50, compared with 50 cents-$1 last week.

"Suppliers are trying to compensate for the low volumes by increasing their premium," said Joshua Rotbart, at in Hong Kong.

Spot gold prices were down 1 percent so far this week.

"Physical markets in have been a little underwhelming ... There was a bit of buying action below $1,250 but that hasn't maintained," said Cameron Alexander, an with Thomson Reuters-owned metals consultancy GFMS.

"Investors may be looking for another leg down which is still surprising given that we have seen the (Sino-U.S.) trade war only ramping up."

In Tokyo, premiums were unchanged at around 50 cents.

(Additional reporting by Arpan Varghese, writing by in Bengaluru; Editing by Sunil Nair)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, July 13 2018. 16:01 IST
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