Indian gold dealers continue to stock up, hope to usher in festive glitter
BENGALURU: Physical gold dealers in India continued to stock up this week ahead of an expected festival sales bump, while the Golden Week in top consumer China did little to revive bullion demand.
Gold is considered an intrinsic part of Indian festivals such as Dussehra in late October, and Diwali and Dhanteras in November.
Demand from dealers has been improving slowly as they expect a revival in retail purchases during the festival season, said Mukesh Kothari, director at Mumbai gold dealer Riddisiddhi Bullions.
Dealers charged a $1 an ounce premium over official domestic prices, inclusive of 12.5 per cent import and 3 per cent sales taxes, down from last week’s premium of $2.
On Friday, local gold futures traded around 50,750 rupees per 10 grams.
Limited supply due to September’s sharp drop in imports also allowed dealers to charge a premium, said a Mumbai-based dealer with a bullion importing bank.
Discounts in China eased to $30-$35 an ounce, their lowest since July, versus global benchmark spot gold rates as a week-long holiday saw some retail buying, although demand was still subdued.
“They have sufficient gold to circulate and that’s why there is no rush for the time being,” said Bernard Sin, regional director for Greater China at MKS, adding that demand could pick-up in the run-up to the Chinese new year.