By Rajendra Jadhav and Rahul Paswan
(Reuters) – Gold demand in India was subdued this week owing to near-record high prices and jewellers’ reluctance to purchase at the financial year’s end.
“Jewellers are wrapping up their accounts for the financial year, so they’re not looking to buy anything new right now,” said Harshad Ajmera of wholesaler JJ Gold House in Kolkata.
India’s financial year runs from April to March 31.
Domestic gold prices were trading around 85,860 rupees per 10 grams on Friday after hitting a record high of 86,592 rupees last month.
Indian dealers this week offered a discount of $10 to $21 an ounce over official domestic prices – inclusive of 6% import and 3% sales levies, down from the last week’s discount of $12 to $27 an ounce.
“The market’s pretty quiet, and supplies are tight since banks are hardly bringing in any gold,” said a Mumbai-based dealer with a bullion importing bank.
In Singapore, gold traded between a $0.50 discount and a $3 premium.
“As long as the market is volatile, we do see some clients coming to buy but demand is not as high as what we have seen last week,” said Brian Lan, managing director at GoldSilver Central.
In top consumer China, gold traded anywhere between a discount of $1 and a $3 premium over spot prices.
People in China will buy gold for long term investment as its outlook is bullish, said Peter Fung, head of dealing at Wing Fung Precious Metals.
Meanwhile, China’s gold reserves rose to 73.61 million fine troy ounces at the end of February, as the central bank kept buying the metal for a fourth straight month.
Dealers in Hong Kong charged on par to $2 per ounce premiums. In Japan, bullion was sold between a discount of $5 and a premium of $1, a trader said.
“Gold has rediscovered its traditional role in being ‘price elastic’ with good buying on dips and selling on the highs,” said independent analyst Ross Norman.
(Reporting by Rahul Paswan in Bengaluru and Rajendra Jadhav in Mumbai; Editing by Shailesh Kuber)
