Asia gold: India discounts, while China buying picks up
Gold was sold at a discount in India for the first time in six weeks on subdued demand, as buyers bet that prices could still fall further after hitting near seven-month lows last week.
Meanwhile, Chinese buying picked up on the back of a firm yuan and trade tensions with the US.
“Jewelers bought gold in the last few weeks for exhibition. They have enough inventory,” said Ashok Jain, proprietor of Mumbai-based wholesaler Chenaji Narsinghji.
The five-day India International Jewellery Show kicked off early last week in Mumbai.
Dealers in India were offering a discount of up to $1.50 an ounce over official domestic prices last week, compared with a premium of $1.50 registered in the previous week.
“As prices corrected, jewelers started buying in the last few weeks. They are now looking for a bigger correction before making purchases,” said Mukesh Kothari, director at bullion dealer RiddiSiddhi Bullions in Mumbai.
In the Indian market, gold futures were trading around 29,641 rupees per 10 grams on Friday, after falling to 29,422 rupees the week before last week, their lowest since January 11.
Premiums in top consumer China ranged between $2 and $3 an ounce over the past week, versus $1-$3 in the previous week.
“There was some good buying in China as the currency strengthened and due to uncertainty over the trade war between the US and China,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
The Chinese yuan hit a one-week high against the dollar earlier last week. A weaker dollar makes dollarpriced gold cheaper for non-US investors.
In the latest development of the ongoing trade spat between the world’s two largest economies, the US Trade Representative’s office said it would begin collecting 25 percent tariffs on another $16 billion in Chinese goods on August 23.
In Singapore, premiums remained unchanged at 80 cents.
Benchmark spot gold was on track for a fifth straight weekly decline, hovering near a 17-month low at about $1,210 an ounce.