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05-11-2024
NEW DELHI: Gold demand in India jumped this week amid festival purchases, although volumes were lower than usual due to record-high prices.
“Retail buying jumped as consumers want to make purchases during the auspicious period but many were making token-buys because of higher prices,” said a Hyderabad-based jeweler.
In India, prices jumped to a record high of 79,775 rupees per 10 grams earlier this week, marking a nearly 33% increase since last year’s Diwali.
The share of coins and bars in total sales increased this year than usual as buyers were unwilling to pay increased making charges for jewelry, said a New Delhi-based jeweler.
Indian dealers earlier this week charged a premium of up to $1 an ounce over official domestic prices on Dhanteras, inclusive of 6% import and 3% sales levies, but offered a discount later in the week of up to $5, compared with last week’s $4 discount.
“In volumes, sales were lower this year than last year. However, considering the price rally, even sales with modest volume drops look promising since, in value terms, they are much higher,” said a Mumbai-based bullion dealer with a private bank.
Diwali and Dhanteras, celebrated this week, are festivals when buying gold is considered auspicious.
“It was a good sales week due to festivities after a long quiet period,” said Brian LAN, managing director at GoldSilver Central.
In Singapore, gold was sold between $0.80 discounts to $2.20 premium.
Demand for physical silver and platinum is rising in Singapore based on dealers’ inventory, Hugo Pascal, precious metals trader at InProved, said.
Dealers in China offered discounts of $11-$14.
China’s gold consumption in the first three quarters of 2024 slid 11.18% as high prices dented jewelry demand.
The ongoing challenges within the Chinese economy continue to impact consumer behavior despite stimulus package, Pascal added.
In Japan, traders quoted at $0.25 discount to $0.5 premium.
There were some purchases and limited selling as people focused on protecting their assets, a Tokyo-based trader said.
Meanwhile, China’s gold consumption in the first three quarters of 2024 slid 11.18% from the same period a year ago to 741.732 metric tons as high prices dented buying interest for jewelry products, the state-backed gold association said on Monday.
Gold jewelry buying, which accounts for 53.9% of total consumption, slipped during January to September to 400.038 tons, down 27.53% from the prior year period, data from the China Gold Association showed.
“Gold prices have been on the rise over the first three quarters, affecting jewelry buying, although the rapid development of new e-commerce models such as live streaming and instant retail has driven the growth of small gram gold jewelry consumption,” the association said.
The most-active gold contract on the Shanghai Futures Exchange jumped by 23.5% from the beginning of the year to 596.72 yuan ($83.69) a gram on Sept. 30.
The contract climbed over 600 yuan a gram to hit a record at 630.44 yuan a gram on Oct. 23 amid the intensified conflict in the Middle East.
Purchases of gold bars and coins, which usually reflect safe-haven demand, climbed by 27.14% to 282.721 tons thanks to “relatively low premium”, it said.
