Make Kitco Your Homepage

Indian gold dealers bank on festivals to bring back customers

Kitco News

By Arundhati Sarkar

(Reuters) - Gold jewelers in India pinned hopes on an upcoming festival season, with dealers offering discounts for a fifth straight week to lure customers back to shops, as activity remained muted in Asian bullion hubs.

In India, discounts eased to $23 an ounce over official domestic prices, inclusive of 12.5% import and 3% sales levies, from last week’s $30.

“Festival season is approaching. If prices remain stable, demand could start improving in coming weeks,” said Mukesh Kothari, director at Mumbai-based dealer RiddiSiddhi Bullions.

On Friday, domestic gold futures prices were around 51,500 rupees per 10 grams, on track for a 0.5% gain for the week.

Jewelers are waiting for a clear price trend and could start building inventory early next month for festivals, said a Mumbai-based dealer with a bullion importing bank.

In China, discounts eased slightly to $44-$48 an ounce from last week’s $45-$50, with most purchases coming only from the investment side.

“The physical market is unlikely to recover by end of this year,” said Peter Fung, head of dealing at Wing Fung Precious Metals.

China has been operating at discounts since February as the coronavirus pandemic hammered demand.

Sales could pick up during the October holiday period, but will still be relatively lower year-on-year, said Samson Li, Hong Kong-based precious metals analyst at Refinitiv GFMS.

Gold was sold at $0.80-$1.50 an ounce premium in Singapore.

“Investors are likely on the sidelines hoping for lower prices,” Vincent Tie, sales manager at Silver Bullion said, adding supply chains were still strained due to the pandemic.

Japan saw premiums of $0.30-$0.50. Both buyers and sellers were active this week, a Tokyo-based trader said.

In Bangladesh, domestic prices were hiked for a second time this week with the best quality gold priced at 76,458 taka ($903.44) per Bhori as a weaker domestic currency drove up import costs.

Reporting by Arundhati Sarkar, Eileen Soreng and and Nakul Iyer in Bengaluru, and Rajendra Jadhav in Mumbai, Ruma Paul in Dhaka; editing by Arpan Varghese and Elaine Hardcastle

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.