India dealers offer discount up to $12/oz this week
China flips to discount of $12-16/oz this week
Spot gold prices hit all-time of $3,578.50/oz on Wed
By Rajendra Jadhav and Brijesh Patel
Sept 5 (Reuters) – Demand for physical gold in major Asian hubs dropped this week due to record high prices, prompting dealers in top consumers China and India to offer steep discounts to attract buyers.
Spot gold prices rose to all-time high of $3,578.50 per ounce on Wednesday and were set for their best week in three months.
Indian dealers offered a discount
of up to $12 per ounce over official domestic prices, including 6% import and 3% sales levies, compared to last week’s premium of up to $4.
“Demand was supposed to pick up with the peak festive season approaching, but the price surge has thrown it off,” said Harshad Ajmera, proprietor of JJ Gold House, a wholesaler in Kolkata city.
Indians will celebrate the Dussehra and Diwali festivals in October this year, when buying gold is considered auspicious.
India’s gold prices traded at around 106,800 rupees per 10 grams on Friday, after hitting a record high 107,226 rupees earlier this week.
Jewellers bought gold last week ahead of the festive season, but the sudden price surge has created uncertainty over demand, said a Mumbai-based bullion dealer.
In China, dealers offered discounts of $12-$16 per ounce this week over the global benchmark spot price
. Last week, gold was sold at par to a $5 premium per ounce.
“Demand has been very weak in China. There is lack of appetite to buy physical metal at these high prices. The absence of new import quotas is a major factor dampening the entire physical flow chain,” said Bernard Sin, regional director of Greater China at MKS PAMP.
In Hong Kong, gold
was sold at par to a premium of $1.60, while in Singapore
, gold traded between at-par prices and a $2.20 premium.
“People are finding it hard to digest higher prices. Because of that we are not seeing much buying, and we are seeing some coming to sell,” said Peter Fung, head of dealing at Wing Fung Precious Metals.
In Japan, bullion
was sold at a discount of $0.50 to a $0.50 premium over spot prices.
(Reporting by Brijesh Patel in Bengaluru and Rajendra Jadhav in Mumbai; Editing by Sonia Cheema)
