India prices at premium after two months as festive season draws buyers
By Rajendra Jadhav and Daksh Grover
(Reuters) - Physical gold dealers in India charged premiums for the first time in two months this week as the upcoming festival season attracted some jewellery buying, while weak consumer sentiment dampened demand in China post-holidays.
Indians will celebrate Dussehra festival on Oct. 12, and Diwali in late October, when buying gold is considered auspicious.
"While gold prices have increased recently, leading to some softening in sales in the past couple of days, overall sentiment remains bullish," said Saurabh Gadgil, chairman of PNG Jewellers in India.
Domestic gold prices in India jumped to a record high of 76,331 rupees per 10 grams earlier this week.
Indian dealers charged a premium of up to $3 an ounce over official domestic prices, inclusive of 6% import and 3% sales levies, up from the last week's discount of $21.
Dealers in India charged premiums last time for the week end Aug. 9, but these have since decreased in response to a record surge in spot gold prices. [GOL/]
Jewellers have been seeing healthy footfalls, but in terms of volume, sales are lower than usual due to record high prices, said a Mumbai-based bullion dealer with a private bank.
A rebound in gold prices to a record peak has dashed the Indian bullion industry's expectations of a lucrative festival season after their hopes were boosted by a deep cut in import duty two months ago.
Meanwhile, dealers in top gold consumer China offered the metal at discounts of $15 to $31 to international spot prices, but retail shops did not see much interest after returning from the Golden Week holidays.
The prices are "reflecting a generally weak domestic Chinese demand, with funds having been diverted into the equity markets following the recent stimulus," said independent analyst Ross Norman.
In Hong Kong, gold prices fluctuated between a $2 discount and a $1.50 premium, reflecting a slight change from the previous week.
Dealers in Singapore sold gold at between par to $2.20 premium, and in Japan between a $0.25 discount to a $0.5 premium.
(Reporting by Daksh Grover in Bengaluru and Rajendra Jadhav in Mumbai; additional reporting by Swati Verma; Editing by Varun H K)