Asia gold: Gold demand improves in India as prices ease; China sees softer buying

Gold demand in India saw a slight uptick this week as softer bullion prices attracted some buyers, though many remained cautious and held off for further price drop. The prices of gold in India were trading around 141,000 rupees per 10 grams on Friday, after rising to 169,880 rupees earlier this month. In the country, gold is an essential part of traditional ceremonies like weddings and festivals.

Bullion dealers in India offered discounts of up to $61 per ounce over official domestic gold prices this week, down from as much as $75 last week. These prices include 6% import duty and 3% sales tax. This decrease in price has led to a rise in demand for the metal in the country.

Spot gold experienced volatile trading, flitting between $4,100 and $4,600 per ounce. Prices briefly touched a four-month low of $4,097.99 on Monday, pressured by a stronger dollar and growing expectations of hawkish U.S. monetary policy. The volatile prices in the global market have had an impact on the demand for gold in various countries.

“Falling prices are helping revive interest in gold,” said a Kolkata-based jeweller. “However, prices remain well above levels seen last year, and many buyers are postponing purchases in hopes of a bigger fall.” The high price of gold is a major concern for many consumers in the country.

In China, bullion traded at premiums of $14-$18 an ounce over global benchmark prices this week, narrowing from a $10-$22 premium last week. In Singapore, gold was sold at prices ranging from a discount of $0.50 to premiums of $3.50 an ounce. The city state aims to turn itself into a gold trading hub for the whole of Asia.