Asia Gold-Festive season sparks demand in India
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China premiums at $20-$45 an ounce this week
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Premiums in Hong Kong at $0.5-$4/oz, Singapore at $2.50-$3
By Rajendra Jadhav and Ashitha Shivaprasad
Sept 30 (Reuters) - The physical gold market in India flipped to a premium this week as demand improved ahead of festivities, while Chinese premiums stayed elevated.
Indian dealers charged premiums of up to $2 an ounce over official domestic prices — inclusive of 15% import and 3% sales levies — versus $2.5 discounts last week.
Indians will celebrate Dussehra, Diwali and Dhanteras in October, when buying gold is considered auspicious.
"This week, demand was good as jewellers were making purchases for festivals. (However), the price rise in the second half of the week moderated demand a bit," said Chanda Venkatesh, managing director of CapsGold, a Hyderabad-based bullion merchant.
Local gold prices were around 50,689 rupees per 10 grams this week.
Jewellers expect robust demand in the upcoming festive season as consumers would celebrate festivals without COVID-19 restrictions, which hampered demand in the past two years, said a Mumbai-based dealer with a private bank importing gold.
In top consumer China, premiums of $20-$45 an ounce were charged over the international benchmark, compared with $26-$40 last week, amid a lack of fresh import quotas.
"There were some limited quotas issued and shipped via Hong Kong. However, it isn’t enough to bring down the premium," said Bernard Sin, regional director for Greater China at MKS PAMP.
And with the People's Bank of China vowing to stabilize the yuan, the country's gold premiums are likely to stay elevated before the start of the Golden Week.
China's central bank controls how much gold enters the country via quotas to commercial banks.
Meanwhile, lower prices gave a slight boost to demand in China, said Peter Fung, head of dealing, Wing Fung Precious Metals.
Hong Kong dealers charged $0.5-$4 premiums this week.
Gold changed hands at $0.25-$0.50 an ounce premiums in Japan, with traders anticipating more buying if global prices stayed near $1,600 levels, while Singapore saw $2.50-$3 premiums. (Reporting by Ashitha Shivaprasad in Bengaluru, Rajendra Jhadav in Mumbai; Editing by Maju Samuel)
