Demand for gold in asian country picked up slightly this week before futures prices hit near a three-month lower on Friday, as the decision of the European Central Bank to cut interest rates and launch a securitization of assets program and purchase of covered bonds continued to dominate market sentiment. Lowe gold futures attracting bargain hunters, bullion dealers said on Friday.
Yellow metal reached its lowest level since mid-June to early Friday at $ 1256.90 an ounce, and remains on track to end the week lower at the rear of rising equities and signs of that the US economy is improving.
Spot gold was up 0.3 percent to $ 1264.30 an ounce at early morning trade in European market, while the US gold futures for December delivery fell $ 1.60 an ounce at $ 1,264.90.
Asian market gold sentiment:
Premiums in the major gold trading centers were slightly higher. On top buyer China hand, local prices were $ 4 to $ 5 per ounce higher than the global point of reference on Friday, compared with about $ 2 last week.
In Hong Kong, the premiums were about 80 cents to $ 1.20 an ounce, up from 70 cents to $ 1.10 last week. Premiums in Singapore were about $ 1.
“The current price level is good for physical purchase because prices fell off dramatically after a prolonged period of stability,” said a physical operator based in Hong Kong.
Markets were watching our next holiday weeks to see if it would buoy demand in China, the biggest importer of bullion. And Chinese markets will be closed on Monday for the Mid-Autumn Festival, while Hong Kong will be closed on Tuesday for the holiday.
“We may not see heavy purchases even on holidays, because the campaign against corruption in China is hurting sales,” said another trader.
Meanwhile, many in the market expressed optimism regarding the purchase from India in the foreseeable future with upcoming festivals of India and the wedding season which is expected to spur demand.
India, the second largest gold buyer after China, will soon be celebrating Dhanteras and Diwali festivals, when it is considered auspicious to buy gold.
It is also hoped that the wedding season to boost demand for bullion. The precious metal a key part of the bride price in India is formed, and are believed auspicious as a gift or offering in religious festivals.
Premiums gold in India are today is roughly $ 4 to $ 5 an ounce, two traders said, but are expected to rise soon.
Premiums could jump to $ 10 to $ 12 an ounce, surge in imports, the head of the largest gold refinery in the country, said earlier this week.
For latest commodity market tips, MCX tips, news & updates with 100McxTips Commodity Advisory, follow us on Twitter and Like on Facebook. And to contact the reporter on this story email at email@example.com or Call: +91-761-4012307