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Indian dealers offer $11/oz discounts vs $23 last week
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Jewellers were on sidelines on price correction hopes-
Indian
dealer
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Some dealers in China offer discounts for second straight
week
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More activity likely once people adjust to high prices-
China
dealer
By Rajendra Jadhav and Kavya Guduru May 12 (Reuters) - Physical gold demand in India improved slightly this week as domestic prices eased from recent record highs, while demand was weak in other Asian centres with some dealers offering discounts in top bullion consumer China to attract buyers. "Investors are hesitant to invest more in gold due to the high prices and the uncertainty caused by the high-interest rate," said Bernard Sin, regional director, Greater China at MKS PAMP, adding the interest rates were making borrowing expensive, and consequently, affecting the demand negatively. In China, gold changed hands at anywhere between a discount of $2 and a $2 premium to global prices , which were trading above $2,000 on Friday. Peter Fung, head of dealing at Wing Fung Precious Metals, noted profit-taking in the physical market and said, "once people adjust to these prices, we may see more activity." In Singapore, premiums of $0.50 to $2 were charged. In Hong Kong , gold was sold from at par with the benchmark to $2 premium. Dealers in Japan charged a premium of $0.50.
Indian dealers were offering a discount of up to $11 an ounce over official domestic prices - inclusive of the 15% import and 3% sales levies - down from last week's discount of $23. "There is a small improvement in demand compared to the last week, but still demand is lower than normal. Consumers are struggling to adjust to the price rise," said Harshad Ajmera, a gold wholesaler in Kolkata. Local gold prices were trading around 60,700 rupees per 10 grams after hitting a record high of 61,845 rupees last week.
Jewellers were on the sidelines as they were expecting
prices would correct further, said a Mumbai-based bullion
dealer.
Indian gold demand in the March-quarter fell 17% to the
lowest level in 10 quarters and is likely to remain subdued even
during June and September quarters on record-high prices, the
World Gold Council said.
(Reporting by Kavya Guduru and Ashitha Shivaprasad in Bengaluru
and Rajendra Jadhav in Mumbai; Editing by Krishna Chandra Eluri)
