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Chinese physical gold premiums rose to a four-month high this week on robust demand, while a price retreat fuelled a slight recovery in purchases in India.
Premiums in top consumer China rose to $15-$22 an ounce over global prices from $9-$17 last week.
“Demand remains very good,” said Peter Fung, head of dealing at Wing Fung Precious Metals, adding the yuan’s strength versus the U.S. dollar prompted people to pick up some gold.
Global benchmark spot prices were bound for a weekly dip, trading around $1,950 on Friday.
The correction will likely provide a bit of a fillip to demand in price-sensitive India and China, said independent analyst Ross Norman, adding Beijing’s stimulus measures pledged this week should also help.
Analysts have also flagged the absence of any new import quotas issued by the People’s Bank of China to commercial banks as a contributor to relatively high premiums.
Data earlier this week showed China’s June net gold imports via Hong Kong fell to their lowest in five months.
Indian dealers offered discounts of up to $4 an ounce over official domestic prices – inclusive of 15% import and 3% sales levies, versus last week’s discount of $6.
“Wholesale demand improved a bit but still it is far lower than normal,” said a Mumbai-based bullion dealer with a private bank.
Local gold prices were trading around 59,000 rupees per 10 grams on Friday, after hitting a 6-week high of 59,984 rupees last week.
Volatile prices and heavy rainfall have been putting off retail consumers, said a New Delhi-based bullion dealer.
Muted summer demand kept Hong Kong premiums little changed this week at $1-$2.25 , while buyers banked on a dip in prices in Japan, which saw gold sold at discounts and premiums around $0.50 an ounce to benchmark rates.
Singapore dealers charged $1.25-$2.25 premiums .
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