Physical gold traders in India slashed discounts as demand picked up ahead of an expected surge in sales next week due to the Akshaya Tritiya festival, while activity in major consumer China was muted by COVID-induced lockdowns.
In India, traders were offering a discount of up to $8 an ounce from official domestic prices, including levies of 10.75% on imports and 3% on sales, down from 10 dollars last week.
Local gold prices were trading around 51,700 rupees per 10 grams on Friday, after hitting a more than a month low at 50,828 rupees earlier in the week.
However, “demand has not fully recovered,” said Harshad Ajmera, a gold wholesaler in Kolkata.
Indians will celebrate the Akshaya Tritiya festival early next week when gold buying is seen as auspicious, but demand is expected to remain weak in the second quarter due to price volatility, it said on Thursday. the World Gold Council (WGC).
“Jewelers are now offering discount on jewelry making fees to boost sales during Akshaya Tritiya,” said a Mumbai-based bullion dealer with a private bank.
In China, discounts hovered at $10 an ounce to global benchmark spot rates from similar rates last week.
COVID-related lockdowns were restricting trading volumes in China and putting pressure on demand, said Peter Fung, head of trading at Wing Fung Precious Metals.
In Hong Kong, gold changed hands at a discount of $3 an ounce to be sold at par with world prices.
Data this week showed China’s net gold imports via Hong Kong fell to their lowest level in 13 months in March as COVID-19 restrictions sapped demand, while Swiss shipments to China and India fell sharply.
Singapore saw premiums of $1.50 to $1.80 an ounce.
“This week we’ve seen more short hedges because previously (wholesalers) had positions that weren’t hedged because prices were rising,” said Brian Lan, managing director of dealer GoldSilver Central.
In Japan, gold sold anywhere between the benchmark and a premium of $0.50.
(Reporting by Bharat Govind Gautam and Seher Dareen in Bengaluru, Rajendra Jhadav in Mumbai; Editing by Krishna Chandra Eluri)