Asian customers cash in on record-breaking bullion rally
Fri July 19 2024
Asian physical gold demand was sluggish this week, reflecting customers’ reluctance to make new purchases despite deep discounts, who were instead seen capitalizing on record-high bullion prices.
Indian dealers offered a discount of up to $65 an ounce over official domestic prices, their highest level in 28 months, inclusive of 15% import and 3% sales levies, versus last week’s discount of $31.
Dealers are aggressively selling off gold misclassified as platinum to clear their inventory before the government makes any potential changes to import regulations, said a Mumbai-based dealer with a private bullion importing bank.
In India, the world’s second-largest gold consumer and a major importer, domestic prices hit a record high of 74,731 rupees per 10 grams this week.
“Gold prices are in deep discounts, but jewellers are holding their fire, hoping for an even steeper price drop with a potential import duty cut in the budget,” said an Ahmedabad-based bullion dealer.
In top consumer China, dealers were offering discounts of up to $6 an ounce on international spot prices, the lowest in more than 2 years as per Reuters records. This is compared with premiums of $8-$19 last week.
“This week, the record-breaking gold price rally has thrown a curveball at physical buying trends in China,” said Bernard Sin, regional director of Greater China at MKS PAMP.
“Some believe that if gold prices continue to rally, a discount of $15 could become a reality, tempered by the typical seasonal slowdown in demand during the summer months.”
In Singapore, gold was sold at a discount of $0.75 to a premium of $2.20 per ounce and between a discount of $1 to a premium of $2 per ounce in Hong Kong.
Dealers in Japan charged premiums of $0.50-$1 per ounce as big moves triggered more selling than purchases, Tokyo-based traders said.
Source: http://in.reuters.com