Gold Regains Festive Appeal as Lower Prices Attract Asian Buyers
Lower gold prices are attracting physical buyers back into key Asian markets, particularly in India and Singapore. This week, gold prices in India fell to Rs 145,538 per 10 grams, marking the lowest level in nearly two months. The price correction has led to increased buying interest, although some consumers are still waiting for prices to drop further.
Demand for gold in India has improved as prices declined, according to Harshad Ajmera of Kolkata-based wholesaler JJ Gold House. He noted that the correction made buyers more interested, resulting in narrower discounts from sellers. Discounts in India have decreased sharply, with dealers offering discounts of up to $14 an ounce over official domestic prices, down from $43 an ounce the previous week.
Festival Season Boosts Interest
With the festival season approaching, buying interest is expected to strengthen. A Mumbai-based dealer from a private bank indicated that jewelers and investors are showing greater interest in purchasing gold. He mentioned that gold could start trading at a premium next week if prices remain stable. India will celebrate Dussehra this month, followed by Diwali in early November, periods when buying gold is considered auspicious.
Regional Market Trends
In China, the largest consumer market for gold, physical gold trade is occurring above the global benchmark, with premiums ranging from $5 to $10 an ounce. However, buyers there are closely monitoring price movements. Bernard Sin, regional director for Greater China at MKS PAMP, stated that periods of price consolidation or declines are prompting increased buying activity. He added that a further drop in international prices could bolster physical demand.
International spot gold prices are on track for a weekly decline, having already fallen by more than 6% in September. In Singapore, gold prices fluctuated within a narrow range, from a $1.5 an ounce discount to a $1 premium. Dealers in Singapore have reported stronger physical buying, as indicated by dealer inventories. Japan’s physical gold market also remained stable, with prices sold at discounts of up to $0.25 an ounce or premiums of up to $0.5.
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