The premium for gold in Mumbai remained steady over the key festival of Akshaya Tritiya due to ample supply.
The rate on gold for immediate delivery in the Indian capital remained around last week’s average of $2-3 over the London spot price, although sales volumes on Tuesday were said to have increased 15 percent on one of the most auspicious days in the country’s calendar to purchase the metal.
“Initial reactions on sales were good and this is what looks like a positive Akshaya Tritiya – you could say at least 10-15 percent up in places,” one source said.
Some sources even suggested sales were were as much as 25 percent higher in some of the southern states.
But rumours are rife that imports this month will be in line with the sizeable March figure of some 125 tonnes, according to sources on the border.
Unseasonal storms last month weighed on demand, some sources suggested, although there are indications that the government issued relief packages to many farmers in the northern regions.
Since India’s 120 million farmers account for around 60 percent of domestic consumption, any impact on agricultural output can have a sustained effect on demand.
In other markets, demand in Shanghai was muted, sources said. Today the premium in Shanghai was quoted at around $4-5 over spot, though movements were initially limited around the $3 mark and around $1 on the SGEI.
Volumes on the SGE are high; there have been suggestions from some participants that the PBoC is stocking up on reserves but price fluctuations have been very limited in recent sessions due to a lack of catalysts – therefore Asian premiums appear stagnant.
“The Asian market altogether is very slow; the jewellery side is OK but quieter than usual,” one source said. “The slowing economy in China is also likely to [hurt] demand in Shanghai, although it may take a while before you start to see the effects.”
Withdrawals from the Shanghai Gold Exchange – a useful barometer for local wholesale demand – for the week ending April 10 were 34.53 tonnes, down from 40 tonnes in the prior week and the lowest figure so far this year. More than 680 tonnes have passed through the vaults in 2015.
In Tokyo, the market has swung to a discount of around $1 to the London spot price, with demand reflective of the current stagnation across Asia. One source suggested that the slow demand in Hong Kong and China and lack of price movements are weighing on Tokyo at the moment.
The Turkish market has also fallen back into small discounts despite signs of opening up a few weeks ago. Some transactions this morning were made with discounts of up to $2 on the favoured .995 LBMA 1kg bar, according to Troy Precious Metals GoldTakas system.
Economic instability and double-digit unemployment continues to hinder consumption although the wedding season is approaching when demand is expected to pick up – premiums of $2-3 are expected, the company told FastMarkets.
Despite most Turkish demand being met by comprehensive scrap supply, imports in March were at their lowest since July last year at just 1.878 tonnes, according to the Borsa.
“People are not buying – it is as simple as that,” a Turkish market observer said.
In Dubai, premiums were stagnant once again – this morning local jewellers quoted the .9999 and .995 bars at flat to a 25-cent premium.
In other locations, Hong Kong sources pegged the premium at $1.50 over spot, in Singapore around $2 and in Bangkok around $2.
(Editing by Mark Shaw)
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