Empty jewelry stores plague Indian market as Dubai exports arrive

MUMBAI / BENGALURU (Reuters) – Physical gold traders in India offered the highest discounts in more than a month and a half this week as buyers stayed on the sidelines even as more bullion poured in from the Arab Emirates United.

FILE PHOTO: Vendor shows gold necklaces to customer in jewelry showroom, after authorities relaxed lockdown restrictions imposed to slow the spread of coronavirus disease (COVID-19), in Calcutta, India, August 10, 2020. REUTERS / Rupak De Chowdhuri

Gold futures in India, traditionally the second largest consumer of gold in the world after China, were trading around 51,800 rupees ($ 691.24) per 10 grams on Friday, after hitting a low record 56,191 rupees at the start of the month.

“A significant amount of gold was imported from Dubai last week and customs cleared it this week. But the demand is not there due to price volatility, ”said Chanda Venkatesh, managing director of CapsGold, a bullion dealer in the city of Hyderabad.

Discounts of up to $ 20 an ounce were offered off official domestic prices – including 12.5% ​​import taxes and 3% sales taxes – compared to the $ 2 premiums last week.

The country remained in the grip of the coronavirus, with the third highest number of cases in the world.

Demand also suffered in China, where discounts edged down to $ 80-70 from last week’s record highs of $ 100-75 against international benchmark spot prices, which were trading in a volatile range. from $ 1,911.00 to $ 2,014.97 per ounce.

“The pandemic situation is unlikely to go away this year, so don’t expect much change,” said Peter Fung, head of transactions at Wing Fung Precious Metals.

Gold has been sold at a discount in China since February.

But it would have become more difficult to buy scrap gold, said Samson Li, Hong Kong-based analyst at Refinitiv GFMS.

The price difference between China and abroad is too large and retailers have started to accumulate gold, he added.

Premiums of $ 1 to $ 1.50 were charged in Singapore, with some using price cuts to buy bullion.

“We’re still seeing a lot more customers looking at the money,” said Brian Lan of Singapore dealer GoldSilver.

In Japan, gold was sold at a premium of $ 0.50.

“Our silver bars are all sold out again,” said a trader at Tokyo-based retailer Tokuriki Honten.

($ 1 = 74.9380 Indian rupees)

Reporting by Brijesh Patel and Arpan Varghese in Bengaluru and Rajendra Jadhav in Mumbai; Additional reports by K. Sathya Narayanan; Editing by Amy Caren Daniel

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