* Indian gold imports plunge 86% year-on-year in June
* Chinese dealers offer hefty discounts of $20-$25/oz
* Steady investment demand in Singapore
* GRAPHIC-2020 asset returns: http://tmsnrt.rs/2jvdmXl
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By Rajendra Jadhav and Arpan Varghese
MUMBAI/BENGALURU, July 10 (Reuters) – Physical gold sold at
a premium in India this week for the first time this year,
driven by plunging imports and a near halt in smuggling that
offset the impact of high unemployment and a rise in domestic
prices across Asia that could deter buyers.
India’s gold imports dived 86% year-on-year in June because
of record high prices and as international air travel was banned
in response to the COVID-19 pandemic.
“Demand is very weak, but dealers are still charging a
premium due to lower imports and as smuggling has nearly
stopped,” said Harshad Ajmera, a gold wholesaler in Kolkata.
In thin trade, dealers charged premiums of up to $3 an ounce
over official domestic prices, up from last week’s $22 discount.
The domestic price includes a 12.5% import tax and 3% sales tax.
Local gold futures rose to a record 49,348 rupees
per 10 grams earlier this week.
In top consumer China, dealers described trade as weak and
quiet as they sold at hefty discounts of about $20-$25 versus
global benchmark spot prices.
“The unemployment rate has been rising. Don’t think people
will have the sentiment to buy more jewellery. Besides, the
stock market has been hot in China recently, sucking more money
away from gold to stocks,” Samson Li, a Hong Kong-based precious
metals analyst at Refinitiv GFMS, said.
Global spot prices breached the $1,800 an ounce
threshold this week.
Activity was muted in Hong Kong too, with gold sold at $0.50
an ounce discount to a $0.50 premium.
Singapore, however, continued to buck the trend, with
premiums of $1.50 per ounce charged against $0.80-$1.50 last
week as interest held, especially from the investment side.
“The belief that the price of gold would soon go beyond the
2011 highs is gaining supporters rapidly,” said Vincent Tie,
sales manager at Silver Bullion.
In Japan, gold was sold between level with the benchmark to
a $0.50 an ounce premium.
(Reporting by Harshith Aranya and Arpan Varghese in Bengaluru,
Rajendra Jadhav in Mumbai and Tom Daly in Beijing; additional
reporting by K. Sathya Narayanan; editing by Barbara Lewis)
