Higher prices keep buyers at bay; India discounts at 6.5-month high

Gold (AFP /Chandan Khanna)
Updated 23 March 2018
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Higher prices keep buyers at bay; India discounts at 6.5-month high

MUMBAI/BENGALURU: Physical gold demand in Asian hot spots slouched this week as higher global prices made buyers hold off on purchases and as discounts in India widened to their highest in 6-1/2 months.
“Demand is very weak. At the current price level, retail buyers and jewellers are not making purchases,” said Ashok Jain, proprietor of Mumbai-based wholesaler Chenaji Narsinghji.
Dealers in India were offering a discount of up to $7 an ounce over official domestic prices, compared with a $3 discount last week. The domestic price includes a 10 percent import tax.
In the local market, gold was trading at around 30,800 rupees per 10 grams on Friday, not far from a 15-month high of 30,839 rupees hit last month.
“If prices remain at the current level then demand will remain subdued. Imports would be significantly down this month,” said N. Vijay, a bullion dealer from Salem in the southern Indian state of Tamil Nadu.
India’s gold imports in February dropped a quarter from a year ago to 63 tons as higher prices curtailed demand in the world’s second-biggest consumer of bullion, provisional data from precious metals consultancy GFMS and bank dealers showed.
In top consumer China, physical gold demand did not see much of a shift from last week due to higher global prices.
Spot gold prices hit their highest in more than a month on Friday as renewed trade war fears between the United States and China dragged the US dollar down, prompting safe-haven buying.
Investors scurried to safety after US President Donald Trump moved toward long-promised anti-China tariffs, prompting a response from China amid fears of a global trade war.
“Physical demand for gold remained low but steady,” said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
“Premiums have been at the same level over the last couple of days, indicating that physical demand-wise, the market hasn’t changed too much (from last week).”
Premiums in China remained unchanged from last week at $8 an ounce over benchmark prices, while premiums in Hong Kong hovered around $1 to $1.50 an ounce range, compared with 60 cents to $1.20 an ounce last week.
Meanwhile in Japan, physical demand was weaker than last week as higher prices in the local currency prompted selling, a Tokyo-based trader said.
Premiums were at 50 cents an ounce over benchmark rates, compared with 50 cents to 75 cents last week.


Shuaa Capital begins consolidation after buying Kuwait’s Amwal

Updated 50 min 36 sec ago
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Shuaa Capital begins consolidation after buying Kuwait’s Amwal

LONDON: The Dubai-based financial services firm Shuaa Capital has started “consolidation efforts” following its acquisition of the Kuwait-based Amwal International Investment Company, according to a statement.
The move follows the recent completion of a public tender process, and Amwal shareholders’ general assembly on Dec. 12, according to a statement from UAE state news agency WAM.
Shuaa said earlier this year that it had struck a deal to boost its stake in Amwal to more than 87 percent.
Amwal’s key subsidiary is Noor Capital Markets, a brokerage with operations in Kuwait, Abu Dhabi, Turkey and Jordan.
Fawad Tariq-Khan, CEO of Shuaa Capital, said the acquisition will allow his company to boost its presence in some of those markets.
“The commencement of this consolidation exercise represents the culmination of our efforts in establishing a broad geographic footprint across the region’s strongest markets. From our heritage in the UAE, and now in our six well-placed jurisdictions, we are well positioned to tap into a diverse range of growing markets,” he said. “We are excited about the potential to take our expertise into Kuwait, Turkey and Jordan, as well as bringing Noor Capital Markets’ services and offerings to our home territories. We believe that we have a winning combination which will support our continued transformation on the path to sustainable profitability.”
Khurram Sayeed, CEO of Noor Capital Markets, said the consolidation had “tremendous prospects” for the businesses.