Physical gold demand increases in China due to Lunar New Year

Beijing (Feb 9)  Chinese Lunar New Year will be celebrated on Friday, 12 February. Gold is a traditional gift in the nation and there has been some increased demand in 2021 as a result. It has been reported that Chinese physical gold dealers charged premiums of $0.50-$5 an ounce over benchmark spot gold prices.

Ronald Leung, chief dealer for Lee Cheong Gold Dealers in Hong Kong said Demand is “a little better due to the Lunar new year,” adding premiums could rise further if prices remain low following the holiday.

Gold rates at the highest scale flipped to a premium for the first time in 11 months mid-January, as demand showed signs of recovery from a pandemic-induced slump. This was evident as in Hong Kong, dealers sold bullion between a discount of $2.50 an ounce and a $2 premium.

Gregor Gregersen, founder at Singapore dealer Silver Bullion confirmed this by stating “We’re starting to see premium increases from some refineries and bulk suppliers for gold and silver bars,” pointing to supply tightness.

Today gold futures are testing the trendline on the 4-hour chart. The bulls managed to break the red resistance level and now the next level on the way up is $1876.4/oz. Ahead of the US open demand is looking good as the volume has been supporting the buy-side in the last couple of sessions.

KitcoNews