Due to firmer demand in the domestic market, gold prices in India flipped into premiums this week. Buyers in top consumer China took advantage of lower bullion prices and increased purchases.
Dealers charge a premium of about $1 an ounce over official domestic prices in India. That contrasts with last week when gold was sold at a discount, of around $2, for the first time in over two months.
Gold futures in India, the world’s second-biggest bullion consumer after China, fell to 31,232 rupees per 10 grams earlier this week.
Retail demand has improved a bit since then due to the drop in prices, said proprietor Ashok Jain.
India meets most of its gold demand through imports. A strong rupee, or Indian currency, make cheaper imports.
Many jewelers are postponing purchases hoping the rupee will rise further and prices will correct.
In top hub China, premiums rose to about $12-14 an ounce over the benchmark from $6-8 last week.
Global benchmark spot gold fell to its lowest in more than two weeks, at $1,268.97, earlier this week. It has since firmed to above the $1,280 mark.
Premiums in Hong Kong were unchanged at 60 cents to $1.30.In Singapore, dividends of around 80 cents were charged.
Managing director at dealer GoldSilver Central in Singapore, Brian Lan, said that buyers would continue to come until there is a resolution between the trade war between U.S. and China. There has been a pickup in demand, particularly on the wholesale side.
Meanwhile, in Japan, global trade uncertainties saw an influx of money into the Japanese yen, which, like gold, is seen as a safe-haven asset. As a result, the gold price on a Japanese yen basis has decreased. At this moment, investment demand is a little stimulated.