Physical gold demand in India weakened this week as rising domestic prices and the end of the wedding season prompted buyers to step back, while gold premiums in top consumer China also declined.
Indian gold dealers were offering discounts of up to $31 per ounce below official domestic prices, which include a 6% import tax and a 3% sales levy. This marks a narrowing from last week’s discount of up to $49.
“The wedding season is wrapping up and the monsoon has begun, so jewellers are anticipating a seasonal drop in demand,” said a Mumbai-based bullion dealer at a private bank. “That’s why they’re holding off on new purchases.”
Domestic gold prices were trading around ₹94,900 per 10 grams on Friday, after reaching a one-month low of ₹90,890 earlier in May.
In China, premiums over global benchmark spot prices ranged from flat to $15 per ounce, down from $16–$30 last week. Analysts suggest a buildup in domestic inventories may be behind the easing premiums.
“Shanghai Gold Exchange drawdowns have fallen to their lowest levels this year, while recent import volumes have been unusually high. This indicates that the domestic market could currently be overstocked,” said Ross Norman, an independent analyst.
Data from Hong Kong’s Census and Statistics Department showed that China’s gold imports through Hong Kong nearly tripled in April, reaching their highest level in over a year.
Despite the supply surplus, investor sentiment in China remained bullish. “Gold bullish bets remain predominant on the Shanghai Futures Exchange (SHFE), even though trading volumes have dipped,” said Hugo Pascal, a precious metals trader at InProved.
Elsewhere in Asia, gold premiums remained modest. In Hong Kong, gold was sold at premiums ranging from $0.30 to $1.30 per ounce. In Singapore, prices were at par with the global benchmark or carried up to a $2.50 premium. In Japan, bullion traded at par to a $0.50 premium.
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