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Physical Demand for Gold Continues to Wane in China, India

4 Jul 2020 7:46 am
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Mumbai (Commodities Control) – Physical gold demand in top consumers China and India continued to struggle due to the COVID-19 pandemic this week, while investment activity ticked up in Singapore and Japan.

Chinese discounts rose to $20-$25 an ounce over benchmark spot prices from $10-$20 last week.

"Most physical businesses are still down. There's only some trading on the Shanghai Gold Exchange," said Peter Fung, head of dealing at Wing Fung Precious Metals.

Global spot gold prices hit a near eight-year peak of $1,788.96 this week.

"People who lost jobs are selling their gold," said Samson Li, a Hong Kong-based precious metals analyst at Refinitiv GFMS.

In Hong Kong, gold was sold at $0.50 an ounce discounts to a $0.50 premium.

China's May net gold imports via Hong Kong fell below exports for the second straight month in May as domestic supply remained abundant.

The mainland could be a net exporter in June too, Li said.

In India, gold futures hit a record close to Rs 50,000 per 10 grams.

Discounts rose to about $22 an ounce over official prices, including a 12.5% import and 3% sales taxes, from $18 last week.

India's gold imports plunged 86% year-on-year in June amid coronavirus lockdowns. Meanwhile, the country's cases crossed 600,000 on Thursday.

Meanwhile, activity picked up in Singapore, where gold was sold at $0.80-$1.50 per ounce premiums.

(Commodities Control Bureau)

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