Gold prices fall to six-week low in India, demand picks up
Gold prices have fallen to their lowest since October 1, as an appreciation in the rupee made buying overseas cheaper.
Mumbai/Bengaluru: Physical gold demand in India was robust this week as consumers stepped up purchases during the traditional wedding season after domestic rates slipped to a near six-week trough, while gains in global prices weighed on bullion’s appeal in other Asian hubs. Demand in India, the second biggest gold consumer after China, usually picks up towards the end of the year going into the wedding and festival season, when buying the metal is considered auspicious.
The current price level of gold was attracting both jewellers and retail consumers, said Daman Prakash Rathod, a director at MNC Bullion, a wholesaler in Chennai.
Domestic gold prices were trading near their lowest since October 1, as an appreciation in the rupee made buying overseas cheaper.
Dealers in India were charging a premium of up to $2 an ounce over official domestic prices this week, down from $3 last week. The domestic price includes a 10% import tax.
“Jewellers are now replenishing inventory as sales during Diwali were decent,” said a Mumbai-based dealer with a bullion importing bank.
Meanwhile, global benchmark spot gold prices were on track to post a second week of gains, having hit a two-week high of $1,230.07 an ounce on Wednesday.
In China, premiums of $4-$6 an ounce were charged over the benchmark, versus $4-$7 last week.
Demand in China is very quiet these days as prices are trading higher and people are hesitating to buy, said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
Premiums in Hong Kong also inched down slightly to $0.70-$1.50 an ounce from $0.80-$1.50 in the previous week.
In Singapore, premiums eased to $0.50-$0.80 an ounce from $0.60-$0.90 previously.
“Local demand has been quiet, especially after Diwali as jewellers don’t see much business and also as gold prices are on the higher side,” said Brian Lan, managing director at Singapore-based dealer GoldSilver Central.
Premiums in Japan were flat for the 10th consecutive week.
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