Gold demand in India remained subdued this week as volatile prices prompted potential buyers to delay purchases, while higher rates across China are expected to potentially offset upcoming seasonal demand.
After gold prices became highly volatile over the past two weeks, buyers are now adopting a wait-and-see approach, hoping for prices to decline further, said a Chennai-based jeweller.
In India, domestic prices fell to Rs 75,459 ($887.28) per 10 grams earlier this week after rising to Rs 79,120 last week.
Indian dealers this week offered a discount of up to $8 an ounce over official domestic prices, inclusive of 6% import and 3% sales levies, down from last week’s discount of up to $9.
“Jewellers stayed on the sidelines this week, waiting for the Federal Reserve’s interest rate cut. They were later surprised by the rupee dropping to a record low,” said a Mumbai-based dealer with a private bullion importing bank.
India’s gold imports are poised for a sharp slowdown in December, while soaring gold prices have led many Indian families to opt for lightweight and lower-carat jewellery.
Gold exports from Switzerland rose in November due to a jump in supplies to India and some revival of deliveries to China and Hong Kong compared with October.
High bullion prices also kept demand soft in other Asian regions, including top consumer China, where discounts of around $5 per ounce to the international price were offered, as per independent analyst Ross Norman. .
In China, high gold prices are one thing but in January demand could increase ahead of the Chinese New Year, even though they will not buy the much heavy stuff, said Dick Poon, general manager at Heraeus Metals Hong Kong Ltd.
In Japan, traders quoted a premium of $1.5 per ounce to discounts up to $4.5, while in Hong Kong, gold was sold at a $2.00 premium, a trader said.
