Asia Gold-Discounts in India widen, China’s COVID curbs keep demand muted
* India sees discount of up to $5/oz vs $2 discount last
* Singapore premiums at $1.20-$1.70 an ounce
May 27 (Reuters) – Gold discounts widened in India this week
as demand faltered due to rise in prices, while demand in top
consumer China was yet to see a substantial pick-up as
COVID-induced restrictions were being gradually eased.
“We lost momentum this week because of the price rise.
Retail buyers are waiting for a correction,” said a Mumbai-based
bullion dealer with a gold importing bank.
Local gold prices were trading around 51,00 rupees
per 10 grams on Friday, nearly up 3% from last week’s 3-month
low of 49,572 rupees.
This week, dealers were offering a discount of up to $5 an
ounce over official domestic prices inclusive of the 10.75%
import and 3% sales levies, down from the last week’s discount
Jewellers were making small purchases as retail demand
during wedding season and Akshaya Tritiya festival was decent
this month, said a Chennai based bullion dealer.
Demand in China was muted with discounts hovering around $2
per ounce, the same as last week.
Demand seems to still be slow with Shanghai in lockdown and
only a couple of districts open in Beijing, said StoneX analyst
Rhona O’Connell said.
Financial hub Shanghai took more gradual steps on Friday
towards lifting its COVID lockdown as China soldiered on with
its uneven exit from restrictions.
In Hong Kong, gold was sold at a discount of about $2, while
Singapore saw premiums between $1.20 and $1.70 an ounce.
“Short-term dollar strength is battering gold and silver
prices, strengthening bearish sentiments towards the metals…
Oftentimes this translates to slower demand for precious metals
on the retail side as well,” said Vincent Tie, sales manager at
Singapore dealer, Silver Bullion.
A stronger greenback makes gold more expensive for holders
of other currencies.
In Japan, gold sold at anywhere between on par with the
benchmark to a $0.50 premium, Tokyo-based traders said.
(Reporting by Eileen Soreng, Bharat Govind Gautam in Bengaluru,
Rajendra Jhadav in Mumbai; Editing by Shailesh Kuber)