Gold Price Dip Attracts Buyers Amid Wedding Season

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Gold futures in India fell to Rs 31,742 per 10 grams on Friday, the lowest level since Jan. 9.

Reuters|

Mar 15, 2019, 09.13 PM IST

Reuters

Gold-Reuters-1200
India's February gold imports fell 10.81 percent to $2.58 bln, according to government data.

MUMBAI/BENGALURU: Physical gold demand improved this week in India as a correction in local prices attracted buyers, particularly with the

wedding season

underway, while premiums in China rose on steady buying in the world's leading consumer.

Gold futures in India fell to Rs 31,742 per 10 grams on Friday, the lowest level since Jan. 9.

"Demand has been improving. Dealers are charging premium due to the limited supplies," James Jose, the secretary of the Association of Gold Refineries and Mints.

India's February gold imports fell 10.81 percent to $2.58 bln, according to government data.

In India, the world's second biggest gold consumer, dealers were charging a premium of up to $2 an ounce over official domestic prices this week, up from last week's premium of up to $1. The domestic price includes a 10 percent import tax.

The appreciation in the rupee has offset the impact of a price rise in the overseas market, said a Mumbai-based dealer with a gold importing bank. The rupee rose to its highest in seven months on Friday, making overseas purchases cheaper.

"Jewellers are building inventory for the wedding season," the dealer said. Gold is an essential part of weddings in India.

Meanwhile, consistent buying in China lifted premiums to $14-$15 over the global benchmark this week from the previous week's $9-$13.

Some modest bank demand was supporting, MKS PAM Group traders said in a note.

Chinese bullion importing banks generally get fresh quotas during the beginning of the year, analysts and traders said.

Traders said higher prices dampened demand in Hong Kong and premiums were at 60 cents-$1.10 an ounce, versus 50 cents to $1.30 in the previous week.

Global benchmark spot gold has risen as much as 0.4 percent this week on global economic slowdown worries and Brexit uncertainties.

In Singapore, premiums narrowed marginally to around 60-70 cents from 60-80 cents previously.

"We are still expecting businesses to buy at this point of time as we need fresh stock when festivals come up. So, with any drop in prices, especially in local currencies, we expect buying," said Brian Lan, managing director at dealer GoldSilver Central in Singapore.

In Japan, demand was subdued and the physical metal was sold at par with the global benchmark as gold prices moved in a very narrow range, a Tokyo-based trader said.



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