BENGALURU/MUMBAI (Reuters) – Physical gold was sold at a premium in India this week for the first time since mid-August as jewellers stocked up, hoping key festivals would bring customers back to stores.

FILE PHOTO: A salesman shows a gold necklace to customers at a jewellery showroom in Ahmedabad, India, Oct. 25, 2019. REUTERS/Amit Dave

Indians will celebrate Dussehra in late October and Diwali and Dhanteras in November, when buying gold is considered auspicious.

“Industry is banking on festivals for demand revival. Jewellers would be happy even if they manage to sell 50% of the last year,” said a Mumbai-based dealer with a bullion importing bank.

Dealers charged premiums of $2 an ounce over official domestic prices, inclusive of 12.5% import and 3% sales levies, versus last week’s $6 discounts. Local gold futures traded around 50,550 rupees per 10 grams on Friday.

“Jewellers have started making purchases for festivals,” said Chanda Venkatesh, managing director of CapsGold, a bullion merchant based in the southern city of Hyderabad.

“Retail buyers have been delaying purchases for the last few months. Jewellers are hopeful they will start buying during the festivals.”

In neighbouring Bangladesh, some people resorted to selling gold with the coronavirus outbreak having shuttered businesses and choking incomes.

“As per our records, around 20,000 families sold ornaments since late March,” said Enamul Haque Khan, president of the Bangladesh Jewellers Association.

Markets in top consumer China were closed for a week-long national holiday that ended Thursday.

Gold was sold at a discount of $30-$32 an ounce on Friday, when markets reopened, said Peter Fung, head of dealing at Wing Fung Precious Metals.

In Singapore, premiums eased slightly to $0.80-$1.40 an ounce, from $0.80-$1.50 last week. [GOL/]

“Prices have gone up a bit. We did get some inquiries, but haven’t really seen much of them coming in and buying,” said Brian Lan, managing director at dealer GoldSilver Central.

In Japan, gold was sold from flat to a premium of $0.50 an ounce, from last week’s $0.25-$0.50.

Reporting by Brijesh Patel, Eileen Soreng in Bengaluru, Rajendra Jadhav in Mumbai and Ruma Paul in Dhaka; Editing by Arpan Varghese and Louise Heavens

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