Festivities set off a gold buying frenzy, but because of the high prices, quantities lag.
Due to record-high prices, gold demand in India increased this week as a result of festival spending, however volumes were lower than normal.
“Retail sales increased because people wanted to acquire things during the auspicious time. However, because of the higher pricing, people were purchasing tokens,” a jeweler from Hyderabad stated.
Earlier this week, prices in India surged to a record high of Rs 79,775 for 10 kilos, representing a nearly 33% increase from Diwali last year.
According to a jeweler in New Delhi, the proportion of coins and bars in overall sales rose this year more than usual because consumers were unwilling to pay higher production costs for jewelry.
Indian dealers gave a discount of up to $5 later in the week, compared to previous week’s $4 reduction, although earlier this week they charged up to $1 an ounce more than official domestic rates on Dhanteras, including 6% import and 3% sales duties.
“Compared to last year, sales volumes were lower this year. However, given the price increase, even sales with slight volume declines appear attractive because they are significantly greater in terms of value, according to a private bank bullion trader in Mumbai.
Japanese dealers gave quotes that ranged from a $0.25 discount to a $0.5 premium.
As people concentrated on safeguarding their investments, there were a few purchases and little selling, according to a trader in Tokyo.
“Festivals after a long quiet period contributed to a good sales week,” said Brian Lan, managing director at GoldSilver Central.
Gold prices in Singapore ranged from a $0.80 discount to a $2.20 premium.
According to dealers’ inventories, there is an increasing demand for real silver and platinum in Singapore, according to Hugo Pascal, a precious metals trader at InProved.
Chinese dealers gave discounts ranging from $11 to $14.
As high prices hurt demand for jewelry, China’s consumption of gold fell 11.18 percent in the first three quarters of 2024.
Pascal said that despite the stimulus package, the persistent issues facing the Chinese economy still affect consumer behavior.
