MUMBAI, India: Demand for physical gold surged in some Asian hubs this week on the back of low domestic prices, with fresh retail interest also allowing dealers to charge higher premiums in India.
Local gold futures in India traded around 44,400 rupees per 10 grams on Friday, near a one-year low of 44,150 rupees they touched earlier in the week.
“Retail demand has been gaining momentum. Showrooms, especially in small towns, are witnessing good footfalls,” said Amit Modak chief executive officer at jeweler PN Gadgil and Sons.
Dealers charged premiums of $6 an ounce over official domestic prices, inclusive of 12.5 percent import and 3 percent sales taxes, compared with last week’s premium of $5.
Jewelers have been replenishing inventory as sales have improved significantly in the last few weeks, said a Mumbai-based dealer with a bullion importing bank, adding investors have started coin and bar purchases at current rates.
In Singapore, $1.60-$2.50 premiums were charged over benchmark spot gold prices, compared with last week’s $1.60-$2.
“Quite a few customers — more so from the retail and wholesale side, including high net worth individuals — picked up gold because prices are lower,” said Brian Lan, managing director at dealer GoldSilver Central.
As for silver, refineries and mints continued to grapple with a backlog of orders, Lan added.
In China, premiums rose to $8-$10 an ounce from $6-$7 last week, dealers said.
There was some safe haven buying as well, said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
Lower prices also boosted demand in Japan, which saw premiums of $0.75.
Bangladesh cut gold prices for the second time this month, with the best quality gold priced at 69,109 taka ($817.47) per Bhori (11.664 grams), amid lower global rates, the Jewelers’ Association said.