Gold demand in India dropped this week as the weakening rupee pushed local gold prices close to record highs. As a result, Indian gold sellers offered discounts to attract buyers. At first, dealers gave discounts of up to $24 per ounce, but later in the week, they began charging a $3 premium instead.
Ashok Jain, a gold wholesaler in Mumbai, explained that the falling rupee increased gold prices in India, which reduced customer interest. On Friday, the rupee dropped to 85.63 per U.S. dollar, compared to 83.76 earlier in the week. Gold prices in India rose to around ₹96,000 per 10 grams on Friday after falling to ₹92,055 the previous week.
Last week’s Akshaya Tritiya festival, when buying gold is seen as lucky, briefly boosted sales. However, after the festival ended, fewer people visited stores across the country, according to a Mumbai-based dealer.
In contrast, gold buying picked up in China after the holiday there. Chinese dealers charged $42 to $49 more per ounce than the international market price, slightly higher than last week.
Peter Fung of Wing Fung Precious Metals said that traders came back strong after the holiday on May 6. Ross Norman, an independent analyst, noted that there’s high demand in China from individual buyers, investors in futures and ETFs, and even from the central bank.
Also, China’s central bank has allowed some commercial banks to buy foreign currency to pay for gold imports, following an increase in gold import quotas.
In other parts of Asia:
- Hong Kong: Gold was sold at the global price or with a small premium of up to $2.
- Singapore: Gold was sold at the global price or with a premium of up to $2.50.
- Japan: Gold was sold with either a $0.50 discount or a $0.50 premium.
