China’s physical gold premiums climbed this week as additional stimulus measures aided sentiment days before Lunar New Year celebrations begin in the top buyer. Meanwhile, Indian retail consumers and jewellers showed limited interest ahead of the Union Budget on Feb 1, 2024.
People’s Bank of China, on 24 January, announced a deep cut to bank reserves to spur economic growth.
Premiums surged, suggesting investors are anticipating further market rescue measures and potential buying sprees ahead of the upcoming Lunar New Year holiday. Chinese dealers quoted premiums of $46-$57 per ounce over spot prices, up from last week’s $42-$54.2 range.
In India, dealers were offering a discount of up to $9 an ounce over official domestic prices — inclusive of the 15% import and 3% sales levies, unchanged from last week as buyers remained on sidelines ahead of the Budget. “Like every year, this year as well, jewellers have taken a pause anticipating a cut in the import duty. They will resume buying after the budget,” according to a Mumbai-based bullion dealer.
In Japan, dealers sold gold at par to $1 premiums.
“Market expects the end of Bank of Japan’s zero rate policy to come in next March-April. That might influence investors to invest in other market products instead of gold,” said a Tokyo-based trader.
Hong Kong dealers charged premiums of $0.5 to $3.50, while gold was sold between at-par prices and $3 premiums in Singapore.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough & Polished
