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Gold discounts widen in top Asian hubs as Covid keeps buyers indoors

Filed on June 26, 2020 | Last updated on June 26, 2020 at 05.31 pm
In China, discounts of $10-$20 an ounce were being offered compared with $10-$15 last week.

(Reuters file)

Indian dealers offering discount up to $18 an ounce over official domestic prices

Physical gold discounts widened in China and India this week as a surge in coronavirus infections restricted buying, while the reopening of retail outlets in Singapore saw a slight pick up in demand for the precious metal.

Indian dealers were offering a discount of up to $18 an ounce over official domestic prices this week, from last week's $13. The domestic price includes a 12.5 per cent import tax and 3 per cent sales tax.

"All jewellery stores have still not opened in cities like Mumbai. Rising prices are making gold unaffordable for many consumers," said Prithviraj Kothari, managing director of RiddiSiddhi Bullions.

Indian gold prices hit a record high of Rs48,589 per 10g on Wednesday.

Retail buyers are not going out shopping as coronavirus cases have been rising in the last few days, said a Mumbai-based dealer with a bullion importing bank.

In China, discounts of $10-$20 an ounce were being offered compared with $10-$15 last week.

"The market is still very quiet, prices are high and only the investment side is buying... Demand is not likely to pick up any time soon, unless things go back to normal," said Ronald Leung, chief dealer, Lee Cheong Gold Dealers in Hong Kong.

Physical gold was sold at a discount of $0.50 an ounce to a premium of $0.50 an ounce versus the benchmark in Hong Kong, slipping from last week's premium of $0.50-$1.50.

In Singapore, premiums of $0.80-$1.50 an ounce were being charged over the benchmark prices versus last week's $0.80.

"Physical stores have reopened with health and safety measures in place, a big build up of pent up demand is heading to retail outlets in Singapore," said Spencer Campbell, director at SE Asia Consulting.

Thailand's gold shipments jumped 735 per cent in May from a year earlier.

In Japan, gold was sold anywhere between at par with the benchmark to a $0.50 premium.

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