By Rajendra Jadhav and Ashitha Shivaprasad
(Reuters) – Gold demand in India crept up this week due to a correction in prices, although volatility in the market prompted some buyers to postpone purchases, while premiums in China firmed on some safe-haven buying.
“There is a lot of pent-up demand in the market. Buyers were desperately waiting for a price correction. Since prices have corrected, they are coming forward,” said a Mumbai-based bullion dealer.
“However, large swings in prices are also confusing buyers.”
Domestic prices in India were around 69,600 rupees per 10 grams on Friday, after hitting a four-month low of 67,400 rupees on July 25.
Dealers charged a premium of up to $9 an ounce over official domestic prices, inclusive of 6% import and 3% sales levies, compared with last week’s $7 premium.
Prices have corrected just before the start of the festival season this month, and the industry is expecting good orders during the ongoing India International Jewellery Show in Mumbai, said a New Delhi-based dealer.
Dealers in China sold gold at par to $18 premium versus last week’s $2 discount to $8 premium.
Retail sales of gold jewellery in China remain subdued but there’s an increased interest in gold bars as a safe-haven asset, said Bernard Sin, regional director of Greater China at MKS PAMP.
China’s central bank held back on buying gold for a third straight month in July. Most analysts believe there will be a resumption in purchases, but a few expect the pause to continue for a few more months.
Japanese dealers sold gold at premiums of $0.25 to $1.
Earlier this week when Japanese stocks fell sharply, people sold gold to get cash to hedge other assets and then came back when prices dropped, dealers said.
In Singapore, bullion was sold at par to $1.25 premium per ounce, while in Hong Kong, it was sold between a $0.5 discount and a $2 premium.
(Reporting by Ashitha Shivaprasad in Bengaluru and Rajendra Jadhav in Mumbai; Additional reporting by Brijesh Patel; Editing by Subhranshu Sahu)
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