India's love for gold rekindles with fresh price boost
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Live Events as a Reliable and Trusted News Source Addas a Reliable and Trusted News Source Add Now! (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Gold started trading at a premium in India this week for the first time in a month and a half, as a price correction lifted buying, while demand stayed subdued in top consumer China.Gold prices in India fell to 140,543 rupees per 10 grams on Thursday, their lowest level since March 27, tracking a sharp decline in international spot gold prices."Demand has improved somewhat after the price correction.
However, retail buyers are still making only small purchases, as larger purchases remain unaffordable even at current price levels," said Amit Modak, chief executive of PN Gadgil and Sons, a Pune-based jeweller.Dealers quoted premiums of up to $6 an ounce over official domestic prices this week, inclusive of 15% import and 3% sales levies, up from last week's discounts of up to $54."Demand is reviving because overseas prices are correcting and the rupee is appreciating. That is giving jewellers the confidence to make purchases," said a Mumbai-based bullion dealer with a private bank.The rupee rose about 0.3% on Thursday to close at 94.3950 per dollar.
Indian markets were closed on Friday for a holiday.A stronger rupee reduces local prices of gold, boosting bullion demand.In China, bullion traded at discounts of $3 to $7 an ounce to the global benchmark spot price, little changed from last week's discount of $4 to $8."China's physical demand for gold has weakened noticeably. Jewellery sales slumped, households grew cautious, and ETFs recorded net outflows," said Bernard Sin, regional director of Greater China at MKS PAMP."Even so, the People's Bank of China remained a consistent buyer,
adding 10 metric tons in May and lifting reserves to 2,332 tons."China's central bank increased its gold reserves for a 19th straight month in May, data from the People's Bank of China showed earlier this month.However, the country's net gold imports via Hong Kong fell about 38% month-on-month in May.In Hong Kong, gold traded between a discount of $0.50 and a $1.80 premium, while in Japan, it was sold at a discount of $0.50.In Singapore, gold was sold at a $0.50 to a $1.80 premium.
The BriefWire