Physical gold demand in key Asian markets remained subdued this week, with Indian buyers delaying purchases in anticipation of a further decline in prices, while demand in top consumer China stayed muted.
In India, domestic gold prices were trading around ₹142,000 ($2,124.47) per 10 grams on Friday after falling to ₹141,334 last week, their lowest level since 3 August.
“Demand slowed again this week after a brief uptick during last week’s Dussehra festival. Buyers are now holding back, expecting prices to fall further,” said a Mumbai-based bullion dealer with a private bank.
Dealers quoted premiums of up to US$7 ($9.96) an ounce over official domestic prices this week, inclusive of 15% import and 3% sales levies, down from premiums of up to US$9 last week.
A Chennai-based bullion dealer said India’s gold imports had remained well below normal levels in recent months, tightening supplies and keeping domestic prices at a premium despite weak demand.
In China, bullion traded from flat to a US$9-an-ounce premium over global benchmark prices, compared with premiums of US$9–US$10 an ounce last week.
Overall physical demand is relatively subdued, though steady buying continued, said Peter Fung, head of dealing at Wing Fung Precious Metals.
Trading volumes have picked up and Shanghai premiums continue to fluctuate amid ongoing market uncertainty, he added.
International spot gold prices were on track for a second straight monthly decline as hotter-than-expected US inflation data and higher oil prices raised expectations of a rate hike by the Federal Reserve later this year.
In Singapore, gold traded between a US$1 discount and a US$1.80 premium this week, compared with a range of a US$1 discount to a US$2 premium last week.
In Hong Kong, gold was sold between a US$1 discount and a US$1.75 premium, compared with last week’s US$0.50 discount to a US$2.50 premium.
In Japan, gold was sold between a US$6 discount and a US$0.50 premium this week.
Investors remained largely on the sidelines this week, though investment demand and physical buying both improved modestly from last week, a Tokyo-based trader said.
(Reporting by Sukanya Mitra in Bengaluru and Rajendra Jadhav in Mumbai; Editing by Subhranshu Sahu)
Main image: Unsplash
