Saturday , 22 September 2018
TRENDING NOW

Gold buying picks up on low prices

Demand for physical gold picked up this week as prices fell to a five-month low although buyers in other major purchasing centres in Asia await a bigger correction before placing orders. According to traders and analysts, “In last few days the Rupee and international prices are moving in favour of buyers. Jewellers are placing orders.” The Rupee rose to its highest in a fortnight last Friday, rebounding from last month’s record low. In the Indian market, gold futures were trading around Rs 30,096 rupees per 10 grams after falling to Rs 30,072 per 10 gram, the lowest level since Feb. 14.

Dealers were charging a premium of up to US $1.5 an ounce over official domestic prices this week, unchanged from the last week. The domestic price includes a 10 percent import tax. “Prices have come down but the correction is not attracting investment demand. Prices need to fall to 28,000 rupees to bring back investors,” said Bachhraj Bamalwa, a bullion dealer based in Kolkata.

India’s gold imports fell for a sixth month in June to 44 tons as a drop in the Rupee to record lows lifted local prices to a near 21-month high curtailing demand. Imports in July could rise to 60 tonnes if prices remain at current levels, a dealer at the private bank said.

Among top consumers China, premiums of US  $1-$4 an ounce were being charged over the international benchmark versus $2-$5 an ounce last week.“The weak yuan is affecting demand … Other investment areas are more favourable than gold, especially amidst a trend of higher interest rates,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong. Premiums in Hong Kong were between 60 cents and $1.30, mostly unchanged from last week.

In Singapore, premiums were quoted between 80 cents and $1.50, compared with 50 cents-$1 last week.“Suppliers are trying to compensate for the low volumes by increasing their premium,” said Joshua Rotbart, managing partner at J. Rotbart & Co in Hong Kong.

Spot gold prices were down one percent so far this week. “Physical markets in Asia have been a little underwhelming … There was a bit of buying action below $1,250 but that hasn’t maintained,” said Cameron Alexander, an analyst. “Investors may be looking for another leg down which is still surprising given that we have seen the (Sino-U.S.) trade war only ramping up,” said the analyst. Reuters

Please like & share: