MUMBAI/BENGALURU: Gold is trading at a premium in India for the first time in more than two months on robust demand following a busy festival week, while a dip in global prices earlier this week helped bullion’s appeal in some Asian hubs.
Dealers in India, the world’s second biggest gold consumer after China, were charging a premium — the first time since early September — of up to $3 (Dh11.02) an ounce over official domestic prices this week.
Last week, they were offering a discount of $3. The domestic price includes a 10 per cent import tax.
“After poor sales during Dusherra, jewellers were expecting weak demand even during Diwali, but surprisingly, demand was better than expected,” a Mumbai-based dealer with a private bullion importing bank said on Friday.
Indians celebrated Dhanteras and Diwali festivals last week, when buying gold is considered auspicious. The Dusherra festival was on Oct. 19.
“Jewellery demand improved in last few days due to a correction in prices,” Mangesh Devi, a jeweller in the western state of Maharashtra, said.
Local gold prices were trading near their lowest level in six weeks, as the rupee gained versus the US dollar, translating into cheaper rates in the international market.
The country’s gold imports in October fell 43 per cent from a year ago to $1.68 billion, pointing to lower supplies.
Meanwhile, global benchmark spot gold prices fell to a one-month low earlier in the week at $1,195.90 an ounce, but have since recovered by about 1.7 per cent to above the $1,215 mark, on track for a weekly gain.
In China, premiums of $4-$7 an ounce were charged over benchmark rates, slightly above last week’s $4-$6 range.
Premiums in Hong Kong also edged up to $0.80-$1.50 an ounce from $0.70-$1.50 previously.
“We saw some buying when the prices came down to $1,200 per ounce level ... But when the market went up to $1,215 it became quiet,” Ronald Leung, chief dealer, at Lee Cheong Gold Dealers in Hong Kong, said.
In Singapore, premiums remained unchanged at $0.60-$0.90 an ounce as demand was tepid, a Singapore-based trader said.
Premiums in Japan were flat for the ninth straight week, a Tokyo-based trader said, adding lower gold prices and a weak yen failed to stimulate public interest.