Asia Gold Price dip a Diwali bonus for Indian market
In Hong Kong, gold was sold at $1-$3 premiums and in Singapore, at $1.50-$2.50 over the benchmark.
Oct 20 (Reuters) - Demand for physical gold picked up pace this week as some consumers bought into a retreat in domestic prices to a near one-month low ahead of the Dhanteras and Diwali festivals.
"Retail consumers are finding prices attractive; they fell just before (the) festival, which is good for jewellery sales," said Harshad Ajmera, proprietor of JJ Gold House, a wholesaler in Kolkata.
On Friday, local gold prices fell to 49,810 rupees per 10 grams, the lowest since Sept. 29.
Along with jewellery, sales of coins and bars for investment was also robust, said a Mumbai-based bullion dealer with a private bank.
Higher purchases allowed dealers to raise premiums to as much as $2.5 an ounce over official domestic prices, inclusive of 15% import and 3% sales levies, from last week's $1.5.
Banks have been diverting supply to markets with higher premiums, such as China and Turkey.
In top consumer China, premiums rose further to $27-$40 an ounce over global spot prices , from $27-$32 last week.
It appears the tightness in the Shanghai market is a result supply difficulties as much as it is good local demand, said independent analyst Ross Norman.
China's central bank controls how much gold enters the country via quotas to commercial banks and of late, there has been no sign of fresh quotas as the PBOC tries to stem the outflow of the yuan, which was approaching lows hit during the 2008 financial crisis.
Bernard Sin, regional director, Greater China at MKS PAMP reiterated that new quotas could be issued post the ongoing Communist Party Congress.
In Hong Kong, gold was sold at $1-$3 premiums and in Singapore, at $1.50-$2.50 over the benchmark.
Jewellery demand could see notable gains in 2023 as consumer spending improves and prices weaken, while physical investment should remain historically high, Metal Focus said in a note.
