Some states have begun easing restrictions as infection cases abate.
“Slowly, businesses are opening up in a few states. As new coronavirus cases are falling, expectations are most states will ease restrictions in the next few weeks,” said Mukesh Kothari, director at Mumbai bullion dealer RiddiSiddhi Bullions.
Dealers offered discounts of up to $12 an ounce over official domestic prices, inclusive of 10.75% import and 3% sales levies. That was unchanged from last week, a level of discount not seen since mid-September 2020.
“Jewellers were sceptical. They don’t know how quickly demand would recover. That’s why they’re not showing interest in making purchases at the higher level,” said another Mumbai-based bullion dealer with a gold importing bank.
On Friday, local gold futures traded at around Rs 49,200 per 10 grams.
India’s gold imports in May surged over nine-fold from 2020’s low base to 12 tonnes.
Discounts in top consumer China narrowed to about $7-$12 per ounce against global benchmark spot gold rates, from last week’s $20-$50, amid stricter Covid-19-related restrictions.
“We believe demand will continue, though supply will diminish, China will be trading back at premium levels,” said Bernard Sin, regional director, Greater China at MKS.
Premiums of $0.50-$1 per ounce were charged in Hong Kong, while in Singapore, premiums remained at $1.20-$1.50 amid muted demand.
“We’ve seen less demand from retail and even the wholesale side,” said Brian Lan, managing director at Singapore dealer GoldSilver Central, adding a semi-lockdown has led to reduced footfall in stores.
Dealers were hopeful of a rebound as restrictions are relaxed from next week.
Japanese dealers sold gold at a $0.30 discount to $0.50 premium. Higher prices muted activity.