Asia Gold-Buying tepid ahead of Chinese holiday, festival season in India
Mumbai-India (Sept 23) Asian physical gold demand remained subdued this week ahead of a national holiday in China and amid what is considered an inauspicious period before the festival season begins in October in India.
Higher international prices also dampened sentiment after they rose nearly 2 percent this week, the highest since end-July, as the Federal Reserve decided to stand pat on U.S. interest rates. Demand for gold is expected to strengthen in the final quarter as India gears up for the wedding season as well as festivals such as Diwali and Dussehra, when buying the precious metal is considered auspicious.
In India, discount over the global spot gold benchmark narrowed to $12 an ounce, from $20 last week, in anticipation of consumer buying during the festival season.
"Jewellers have started to stock up for the upcoming festive season, but the retail demand is still weak," said Daman Prakash Rathod, director at Chennai-based wholesaler MNC Bullion.
"... Going by the current trend gold prices in India will start trading at a premium within next few weeks," a Mumbai-base private banker said.
Gold has been trading at a discount for most part of the year in India. Premiums in top consumer China varied between $3-$5 an ounce to the spot benchmark .
China's peak season for gold demand kicks off next week with the National Day holiday, lasting until Lunar New Year early next year.
"The demand is expected to be muted this time due to higher prices and a slowdown in the economy," a Singapore-based banker said.
Hong Kong prices were seen at a premium of 60-70 cents, while premiums in Singapore stood nearly unchanged from last week at about 80 cents an ounce.
"With uncertainty over Fed's decision to hold rates and chances of a hike in December, more and more clients are looking to sell physical holdings than buying," said Brian Lan, managing director at Singapore-based gold dealer GoldSilver Central.
Japanese markets saw a slight increase in demand at the beginning of week, however, the interest waned by the end of the week as prices rose, a Tokyo-based trader said.
Prices were flat to a discount of 10 cents in Tokyo.
Source: KitcoNews
