Local gold prices in the world’s second-largest consumer have risen nearly 1% this week, which, combined with weak retail demand, has prompted jewelers to cut back on purchases, a bullion dealer says based in Mumbai.
Dealers charged premiums of up to $0.5 an ounce over official domestic prices, including levies of 10.75% on imports and 3% on sales, down from premiums of $1 from last week.
Many retail buyers are delaying purchases, said Ashok Jain, owner of Mumbai-based gold wholesaler Chenaji Narsinghji.
India reported 264,202 new coronavirus cases in the past 24 hours, taking its total to 36.58 million.
While demand in Asia has been relatively lackluster with higher spot prices, there could be some tension in the market as some refineries tend to shut down for a week or two at the end of the year (2021) for seasonal closures, inventory checks and audits. , said independent analyst Ross Norman.
In China, premiums widened to around $4-5 an ounce over benchmark spot gold rates from $3.5-5 last week.
Hong Kong saw premiums stabilize between $0.50 and $2.00.
In China, the level of premiums suggests interest is firm but not exceptional ahead of the Lunar New Year, which comes at the end of a cluster of seasonal festive physical purchases, Norman added.
Singapore dealers were pricing around $1.80 an ounce above world rates against a premium of $1.50 to $1.80 last week.
As the Lunar New Year approaches, we are seeing an increase in gold purchases at our retail store for gifts, said Vincent Tie, Dealer Sales Manager at Silver Bullion.
In Japan, $1 discounts continued to be offered.