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Still no takers as Indian gold dealers offer discounts for fourth week

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09/11/2020 | 09:43am EDT
FILE PHOTO: A saleswoman displays a gold necklace to a customer inside a jewellery showroom on the occasion of Akshaya Tritiya, a major gold buying festival, in Mumbai

Physical gold dealers in India were forced to offer discounts for a fourth straight week as bullion remained unattractive for most retail consumers.

In India, the second-biggest buyer after China, demand took a further hit due to the start of 'Shradh', a two-week period considered inauspicious to buy gold and other assets.

Local gold futures traded around 51,445 rupees per 10 grams on Friday, having hit an all-time high of 56,191 rupees last month.

Discounts eased to $30 an ounce over official domestic prices, inclusive of 12.5% import and 3% sales levies, from last week's $40.

While demand usually picks in the run up to the October- November festival season, a worsening COVID-19 outbreak has hammered sentiment, with India's economy shrinking by nearly a quarter in April-June.

"Even during the festivals, demand will remain lower than usual due to higher prices," said a Mumbai-based dealer with a bullion importing bank.

A dip in benchmark global spot prices however, triggered buying from customers in Singapore.

"As long as prices come down, we'll see more buying," and many more clients are now looking at gold, Brian Lan of dealer GoldSilver said, adding, however, that retail purchases were muted.

Premiums were unchanged at $0.80-$1.50 an ounce versus the benchmark.

"Sales were respectable, but the lowest in the past four weeks," Vincent Tie, sales manager at Silver Bullion said.

In China, demand remained weak with gold sold at $45-$50 discounts, versus last week's $56 level.

Discount may narrow, especially going into the fourth quarter wedding season, said Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS,

Japanese premiums were unchanged at $0.50.

In Bangladesh, domestic prices were hiked with the best quality gold priced at 74,008 taka ($874.49) per Bhori, or 11.664 grams, with a higher dollar driving up import costs.

Meanwhile, Thailand's central bank on Thursday said it would soon allow gold trading in U.S. dollars, as the baht remained strong.

By Rajendra Jadhav and Arundhati Sarkar

Stocks mentioned in the article
ChangeLast1st jan.
EURO / THAI BAHT (EUR/THB) -0.01% 37.02 Delayed Quote.11.17%
GOLD 0.95% 1905.6 Delayed Quote.25.01%
SILVER 1.87% 23.7815 Delayed Quote.36.05%
US DOLLAR / THAI BAHT (USD/THB) -0.28% 31.55 Delayed Quote.6.18%
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