BENGALURU/MUMBAI (Reuters) – Physical gold discounts rose in India this week as buyers remained on the sidelines, while demand in Singapore and other Asian hubs ticked up as buyers took advantage of lower prices ahead of holidays.
Indian consumers avoided gold purchases due to Khar Mass, a period considered to be inauspicious that runs from Dec. 15 to Jan. 14.
“People are more focused on holidays than making big ticket purchases,” said Mukesh Kothari, director at Mumbai gold dealer RiddiSiddhi Bullions, adding demand would remain subdued next week.
Dealers were offering a discount of $2 an ounce this week over official domestic prices, inclusive of 12.5% import and 3% sales levies, up from last week’s $1.
Spot gold prices were set to mark their first weekly decline in four.[GOL/]
In China, discounts narrowed to $15-$20 an ounce, versus last week’s $16-$20, while in Hong Kong, premiums of $0.50-$1.50 were being charged from last week’s $0.50.
Physical gold has traded at a discount since March in China, the world’s biggest bullion consumer, as the coronavirus pandemic deterred buying.
Dealers said lower prices going into festivities and pent-up demand might boost consumption.
In Singapore, gold was being sold at a premium of $0.90-$1.20 an ounce over global benchmark prices, compared with $0.80-$1.30 last week, as demand picked up on gift buying ahead of Christmas, traders said.
However, the Southeast Asian island has lost out on tourist demand this year, having kept its borders largely shut for most of 2020 to curb the virus.
“With end-user demand originating from Indonesia and Malaysia in the last few years for the Singapore market, the sealed borders have limited the volumes,” said Rahul Kedia, Director at Arihant Jewellers.
In Japan, gold was being offered at a $0.50 premium over benchmark prices.
Reporting by Sumita Layek in Bengaluru and Rajendra Jadhav in Mumbai. Additional reporting by Diptendu Lahiri. Editing by Mark Potter