Weak demand for gold in Asia as prices head fifth weekly gain

Weak demand for gold in Asia as prices head fifth weekly gain

Demand for Jewelry gold & Bars in Asia’s largest consumer of being mediocre as they followed prices of metals were on underway to fifth weekly gain, and bullion dealers said purchasing will continue to be slow during the summer.

Prices provided in China, the No. 1 consumer of gold jewelery, bullion and coins, fell a premium discount this week compared to the worldwide reference point it reached a maximum of three months.

The demand in the second largest buyer of India was also muted with many waiting to import rules to be relieved before making large purchases.

Premiums on Hong Kong, a major trading route in China, there were about 50 cents to $ 1.20 an ounce to inclusive rate, traders said. A few were including selling at a small discount or alongside with world prices.

In China, local prices were at a discounted rate of about $ 1 per ounce. Last week, prices were on par with London prices.

Thailand further prices were at a discounted rate, while Singapore continued premiums range between 80 cents and $ 1.20.

“Even with a fall in prices, I do not think the demand will rise a lot,” said a trader in Singapore.

Asia bought a record amount gold last year where prices fell 28 percent following a 12-year lockdown. Consumers advanced their purchasing as prices were lower, eat out some of the demand this year.

In India, consumers were expecting the government to present their budget next week, with many countries in the market waited a cut in the record level of gold import duties of 10 percent right now.

Fighting with a widening trade deficit, India last year raised its import duty on gold so it was necessary that a fifth of all imports to export. The movements resulting in lower imports, the shortage of the metal and domestic prices.

A relaxation of the import rules even more push the domestic prices which are currently 25 USD – 30 USD per ounce higher than London prices – the weakest since February, traders said. Premiums had risen to over $ 100 last year.

While earlier the change in the policy announced by the Reserve Bank of India (RBI) to allow the star and key export hubs for gold trading had been sent the premium in cash in gold from $ 30 to $ 40 to $ 20 – $ 15.

100Mcx commodity advisory said ”  The clients look sitting on sidelines because they expect a favorable ruling on the reduction of import duties on gold during budget, which itself may result in a further decline in prices of gold in the country. There are hopes of 2% -4% in cutting import duties on gold to be heralded by the newly elected government over the budget presentation in July second week.”

Accordance with the industry players, the premium on gold lower current is the lowest since last September, when individuals rushed to sell their assets in order leverage the unexpected rise in the gold prices.

 

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