Physical gold demand in most key Asian hubs improved modestly this week as lower prices lured some buyers back to the market, though others awaited a steeper decline.
In India, domestic gold prices fell to 145,538 rupees per 10 grams this week, their lowest in nearly two months.
Demand was better than last week as prices corrected, making buyers more interested and narrowing the discounts offered by sellers, said Harshad Ajmera of wholesaler JJ Gold House in Kolkata in eastern India.
Dealers quoted discounts of up to $14 an ounce over official domestic prices this week, inclusive of 15% import and 3% sales levies, compared with last week’s discounts of up to $43.
“Gold could start trading at a premium next week if prices stay around current levels. Jewelers and investors are now showing more interest in buying as festival season is approaching,” said a Mumbai-based dealer with a private bank.
Indians will celebrate Dussehra festival this month, and Diwali in early November, when buying gold is considered auspicious.
In top consumer China, bullion traded at premiums of $5 to $10 an ounce to the global benchmark price.
“Demand remains highly price-sensitive, with buyers being more active during periods of price consolidation or pullbacks. A further decline in spot gold prices could therefore provide additional support to physical volumes,” said Bernard Sin, regional director, Greater China at MKS PAMP.
International spot gold prices headed for a weekly decline on Friday after falling more than 6% in September.
In Singapore, gold was sold between a $1.5 discount and a $1 premium this week, while in Hong Kong it traded between a discount of $1.5 and a premium of $0.5.
“We are noticing an uptick in physical demand in Singapore, based on dealers’ inventory,” said Hugo Pascal, a precious metals trader at InProved.
Meanwhile, in Japan, gold was sold between a $0.25 discount and a $0.5 premium.
($1 = 96.2894 Indian rupees)
(Reporting by Sukanya Mitra in Bengaluru and Rajendra Jadhav in Mumbai; Editing by Mrigank Dhaniwala)
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