Jewellers made substantial purchases last month to replenish inventory
Gold demand moderated this week after local prices recovered from a five-month trough, while buyers in other major hubs were also put off by a slight uptick in prices. “Until last week demand was very good, but now some buyers have taken a pause due to the price rise,” said Harshad Ajmera, proprietor of JJ Gold House, a wholesaler in Kolkata. Local gold futures were at 49,400 rupees per 10 grams on Friday, up from 47,550 rupees earlier in the week which was the lowest level since June 19. (Also Read: Silver Has Outperformed Gold This Year. Is Silver The New Gold? )
Jewellers made substantial purchases last month to replenish inventory, said a Kolkata-based bullion dealer, adding “a sudden price rise has been confusing jewellers. They are waiting for a clear direction.” The dealers were charging a premium of $3.5 an ounce over official domestic prices this week, inclusive of 12.5 per cent import and 3 per cent sales levies, down from last week’s premium of $5. Neighbouring Bangladesh cut prices for all categories of gold for the second time in little over a week due to weak demand, Jewellers’ Association said.
The new rates, with the best quality gold priced at 72,667 taka ($863.23) per Bhori, or 11.664 grams, came into effect from Wednesday. In China, gold was sold at a discount of $20 an ounce to the international spot price versus last week’s $17-$20. In Hong Kong, the metal was sold at a premium of $0.50-$1.50.
Traders said a slump in international prices earlier this week triggered some interest which then turned lacklustre. Benchmark spot gold prices are on track for a rise of nearly 3 per cent this week, having fallen to a five month low of $1,764.29 per ounce on Monday. Singapore premiums were unchanged from last week at $1.20 an ounce.
“While good buying activity continues, we suspect more investors are adopting a wait-and-see approach hoping to catch lower prices amidst COVID-19 vaccine-driven optimism,” said Vincent Tie, sales manager at Silver Bullion. In Japan gold was sold between flat and a premium of 50 cents to benchmark spot rates.