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Empty Jewellery Shops Plague India Market as Dubai Exports Arrive

FILE PHOTO: A sales woman wearing a face shield and a mask arranges gold bangles at a jewelry showroom in Kolkata, India, May 26, 2020. REUTERS/Rupak De Chowdhuri

FILE PHOTO: A sales woman wearing a face shield and a mask arranges gold bangles at a jewelry showroom in Kolkata, India, May 26, 2020. REUTERS/Rupak De Chowdhuri

On Friday, gold futures in India, traditionally the world's second biggest gold consumer after China, were trading around 51,800 rupees ($691.24) per 10 grams, having surged to a record high of 56,191 rupees earlier this month.

Physical gold dealers in India this week offered the highest discounts in more than one and a half months, as buyers stayed away even as more bullion flowed in from the United Arab Emirates.

On Friday, gold futures in India, traditionally the world's second biggest gold consumer after China, were trading around 51,800 rupees ($691.24) per 10 grams, having surged to a record high of 56,191 rupees earlier this month.

"A significant amount of gold was imported from Dubai last week and customs cleared that this week. But demand is not there because of volatile prices," said Chanda Venkatesh, managing director of CapsGold, a bullion merchant in the city of Hyderabad.

Discounts of up to $20 an ounce were offered against official domestic prices — including 12.5% import and 3% sales levies — versus the $2 premiums last week.

The country remained in the grip of the coronavirus, with the third highest number of cases globally.

Demand suffered in China as well, where discounts eased slightly to $80-$70 from last week's record $100-$75 levels versus international benchmark spot prices, which traded in a volatile $1,911.00-$2,014.97 an ounce range.

"The pandemic situation is unlikely to go away this year, so don't expect much change," said Peter Fung, head of dealing at Wing Fung Precious Metals.

Gold has been sold at discounts in China since February.

But it has reportedly become more difficult to buy gold scrap, said Samson Li, a Hong Kong-based analyst at Refinitiv GFMS.

Price difference between China and outside is too huge and retailers have started to hoard gold materials, he added.

Premiums of $1-$1.50 were charged in Singapore, with some using price dips to buy bullion.

"We still see many more clients looking at silver," said Brian Lan of Singapore dealer Gold Silver.

In Japan, gold was sold at $0.50 premiums.

"Our silver ingots are all sold out again," a trader at Tokyo-based retailer Tokuriki Honten said.

first published:August 21, 2020, 19:41 IST