Higher prices dampened physical gold demand in major Asian centres this week, while also prompting some investors to sell off their holdings.
“Buyers aren’t keen on picking up gold at these prices. In fact, some investors are offloading the coins and bars they grabbed when prices were lower,” Ashok Jain, proprietor of Mumbai-based gold wholesaler Chenaji Narsinghji, was quoted in a Reuters report.
On Friday, domestic gold prices in India reached a record high of 102,191 rupees ($1,165.45) per 10 grams, before settling around 102,100 rupees.
Sharp discounts
This week, Indian dealers offered gold at a discount ranging from $9 to a premium of $2 per ounce over official domestic prices.
This includes a 6% import levy and a 3% sales levy. Last week, the discount was up to $7, according to the report.
Jewellery exporters are not keen to buy gold, as demand from their biggest market, the United States, is likely to fall due to tariffs imposed by US President Donald Trump, said a Mumbai-based bullion dealer with a private bank.
In China, a major consumer market, gold was traded at a premium of up to $2 per ounce over the global spot price.
This is a change from last week, when gold was quoted at a discount of $4.2 to a premium of $12 per ounce.
“Last week, we saw some buying interest, but this week, prices have been on the rise, so there’s less buying interest. Overall, we are seeing people buying gold on dips,” Peter Fung, head of dealing at Wing Fung Precious Metals, told Reuters.
Gold prices in Hong Kong ranged from par to a premium of $1.60, while in Singapore, gold traded at par to a premium of $2.50.
Brian Lan, managing director at Singapore-based GoldSilver Central, was quoted in the report:
As gold prices have gone up, we see more selling from the retail and wholesale sides. We see more of them borrowing gold at this point in time because prices are edging on the higher side.
A Tokyo-based trader reported that bullion in Japan was sold at a $0.25 premium above spot prices.
Gold prices
Meanwhile, gold prices on COMEX hit a record high on Friday, driven by hopes of US interest rate cuts and ongoing tariff disruptions.
This comes after a report indicated the US had implemented tariffs on imported 1-kg gold bars.
The December gold contract on COMEX was up 1.1% at $3,490.70, after hitting an all-time high of $3,534.10 earlier on Friday.
According to a Financial Times report on Thursday, citing a letter from Customs and Border Protection, the United States has imposed higher tariffs on imported 1-kg gold bars.
This news led to an approximate $100 widening of the price spread between New York gold futures and spot gold prices.
The letter, dated July 31, indicates that both 1-kg and 100-ounce gold bars should be classified under a customs code that carries increased tariffs.
This change could significantly affect Switzerland, the world’s leading gold refining centre.
Haresh Menghani, editor at FXstreet, said:
Investors remain on edge in the wake of persistent trade-related uncertainties, especially after US President Donald Trump’s fresh tariff threats this week, which could offer some support to the safe-haven Gold price.
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