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A Mumbai-based dealer at a private precious metals import bank said jewellers are not keen to add stocks at current price levels as there are no signs of a recovery in retail purchases. Photo: Shutterstock

In India, the world’s second-largest gold consumer, physical demand for gold slowed this week as prices neared record levels and a lack of public holidays slowed retail purchases.

“Indian consumers are price sensitive. Their buying patterns are changing. They wait for a price correction and buy when they feel comfortable,” said Amit Modak, chief executive officer of PN Gadgil & Sons, a jeweller based in the western city of Pune.

Domestic prices hit a record high of Rs 74,442 per 10 gram last month and are currently trading at around Rs 72,800 per 10 gram.

Indian dealers were offering discounts of up to $13 an ounce off the official domestic price, which includes a 15 percent import tax and a 3 percent sales tax, up from a discount of $10 last week.

A Mumbai-based dealer at a private precious metals importing bank said jewellers are not keen to build up stocks at current price levels as retail purchases show no signs of recovery.

In China, the biggest consumer, dealers were charging premiums of $18-25 an ounce over international spot prices this week, compared with $18-26 last week.

Traders said Chinese demand was likely to remain weak as the summer season approaches, a time when activity typically slows.

“Future developments such as the lifting of import quotas and global price fluctuations may spark renewed interest (from China) later this year,” said Bernard Singh, Greater China regional director at MKS-PAMP.

Gold sold at a premium of $2.20 to face value in Singapore and at a premium of $2 to face value in Hong Kong.

In Japan, gold bars sold at a $0.5 premium to face value, down slightly from last week.

“Trading has been quiet this week due to bad weather but buying interest remains strong,” a trader in Tokyo said.

Meanwhile, the World Gold Association said in its annual survey that more central banks plan to increase their gold reserves within the next year.

First Edition: June 21, 2024 | 5:08 pm IST

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