Asia Gold-Sky-high rates keep Asian retail buyers at bay

Reuters

Asia Gold-Sky-high rates keep Asian retail buyers at bay

Sep 13, 2024 at 6:27 am GMT

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Wealth clients made purchases as prices soar- Singapore dealer

China discounts between $8.6-$10 this week

Jewellers made purchases last month when prices dipped - Indian dealer

By Rajendra Jadhav and Ashitha Shivaprasad

Sept 13 (Reuters) -Retail buyersin key Asian hubs shied away from gold purchases due to soaring prices, forcing dealers to offer deep discounts in top consumers India and China.

Spot gold prices XAU= hit an all-time high of $2,570.21, driven by U.S. rate cut bets. GOL/

"The rallying prices dampened demand that had been recovering following a hefty import duty cut. Retail consumers have once again moved to the sidelines," said Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji.

In July, India slashed import duties on gold to 6% from 15%, a step aimed at tackling smuggling.

Dealers this week offered a discount XAU-IN-PREM of up to $22 an ounce over official domestic prices, inclusive of 6% import and 3% sales levies, highest in nearly two months and up from last week's $13 discount.

In India, the world's second-largest gold consumer and a major importer, domestic prices MAUc1 were at 73,200 rupees ($872.23) per 10 grams, hovering around a record high of 74,731 rupees hit in July.

Jewellers made purchases last month when prices were ruling below $2,500, but now they are waiting for a correction before buying for the festive season, a Mumbai-based dealer with a private bullion importing bank said.

Chinese dealers XAU-CN-PREM offered discounts between $8.6-$10 over global spot prices, while in Hong Kong bullion was sold between $0.5 discount to $2 premium.

Chinese demand remains lacklustre but prices are likely to continue rising, so people might have to eventually adjust to them and purchases might pick up by October-November, said Peter Fung, head of dealing, Wing Fung Precious Metals, Hong Kong.

Gold was sold between $0.8 discount and $2.20 premium XAU-SG-PREM in Singapore.

Wealth clients made purchases this week, as prices soared and bullion's path remained bullish, however retail and jewellery demand in the country remains muted, said Brian Lan at Singapore-based dealer GoldSilver Central.

In Japan, dealers sold gold XAU-TK-PREM at par to $0.5 premiums.

($1 = 83.9225 Indian rupees)

Reporting by Ashitha Shivaprasad in Bengaluru and Rajendra Jadhav in Mumbai; Editing by Rashmi Aich

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