India rebates widen, China sees safe-haven buying

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Physical gold dealers offered deeper discounts in India this week to entice buyers at the end of the wedding season, while some consumers in China bought bullion to hedge against rising economic concerns.

Marriages are one of the main drivers of gold purchases in India.

“Traffic at jewelery stores is much lower than last month. Retail shopping has been tepid since the end of the wedding season,” said Mukesh Kothari, manager of retailer RiddiSiddhi Bullions in Mumbai.

Discounts of around US$8 an ounce were cited off official domestic prices – including 10.75% levies on imports and 3% on sales – from the week’s US$6 discounts last.

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Buying from dealers and jewelers was also weak as retail demand may remain subdued over the coming weeks, said a Mumbai-based dealer with a private bullion import bank.

In China, gold changed hands at roughly the same level as global benchmark spot prices at premiums of US$2-3 per ounce.

While trading volumes in Shanghai were relatively low, people still like to buy gold as a safe haven, especially amid inflation and geopolitical issues, said Peter Fung, head of trading at Wing Fung Precious. Metals.

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It’s been nearly a month since the Shanghai hub lifted lockdowns, but China continues to deal with sporadic outbreaks of COVID-19, and consumers have remained cautious.

“The resilience of the yuan may encourage growing interest from local investors to top up gold stocks,” said Bernard Sin, regional director for Greater China at MKS.

Swiss customs data this week showed gold shipments to China fell in May.

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In Hong Kong, gold was sold at any price between a discount of US$1.8 an ounce and premiums of US$1.80, while traders in Singapore were charging premiums of US$1.20 US$ to US$1.70.

Wholesalers have been quiet this week amid price swings, said Brian Lan, managing director of dealership GoldSilver Central.

Japanese traders sold gold at par with the benchmark at premiums of US$0.50 an ounce.

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