Physical gold premiums in India have surged to a ten-month high as record prices, reaching around 109,500 rupees ($1,240.09) per ten grams, failed to deter investors ahead of the upcoming festive season. Earlier this week, gold prices even reached a historic peak of 110,666 rupees. This robust demand reflects a growing sentiment among investors that gold prices will continue to rise, with many keen to snap up coins and bars in anticipation of future gains.
Dealers reported premiums of up to $7 per ounce over the official domestic prices, which incorporates a 6% import tax and a 3% sales levy. This marks a significant increase from the previous week when dealers were quoting a discount of up to $6, transitioning to a premium of $2. With major festivals like Dussehra and Diwali approaching in October, typically auspicious times for gold purchases, many retail buyers who had previously held off on buying are now moving to finalize their acquisitions, according to sources in Mumbai.
In contrast, the situation in China, the world’s top consumer of gold, is strikingly different. Dealers are offering discounts ranging from $21 to $36 per ounce over global benchmark spot prices, marking the widest discounts seen since May 2020. This represents a decline from last week’s offerings of $17 to $24. An analyst noted that weak domestic demand in China has prompted a pivot among investors towards riskier assets like equities, which has negatively impacted gold premiums over the past six months.
Adding to the complexity, Swiss customs data released on Thursday revealed a staggering 254% increase in gold exports to China in August compared to July, reaching levels not seen since May 2024. This sharp rise is anticipated to be driven by a predicted uptick in demand by the end of September.
In other Asian markets, gold sold in Hong Kong maintained a parity to a $1.60 premium, while premiums in Singapore varied from par to $1.40. Japanese bullion was sold at par to a $1 premium. Retailers in these regions continue to view gold as a valuable asset class, supporting the ongoing trend of demand for physical gold.
